Unit II · Law of Banking and Negotiable Instruments
| Act / instrument | Section | Name |
|---|---|---|
| Negotiable Instruments Act, 1881 | 10 | Payment in due course |
| Negotiable Instruments Act, 1881 | 85 | Cheque payable to order |
| Negotiable Instruments Act, 1881 | 131 | Non-liability of banker receiving payment of cheque |
AIR 1987 SC 1603 · Supreme Court of India
A banker cannot debit the customer's account on a forged cheque; even long delay in detecting the forgery does not ratify it unless the customer is estopped by negligence.
AIR 1990 SC 1423 · Supreme Court of India
A collecting bank must act in good faith and without negligence to claim the protection of section 131.
AIR 1967 SC 389 · Supreme Court of India
A bank that pays on a forged endorsement cannot charge the true owner; payment is not in due course.