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Section 131 - Non-liability of banker receiving payment of cheque, Section 131A - Application of Chapter to drafts, Section 132 - Set of bills : Negotiable Instruments Act 1881

What is Non-liability of banker receiving payment of cheque? What is Application of Chapter to drafts?  What is Set of bills? Non-liability of banker receiving payment of cheque, Application of Chapter to drafts and Set of bills are defined under Section 131, 131A and 132 of Negotiable Instruments Act 1881

 

 

Section 131 of Negotiable Instruments Act 1881: "Non-liability of banker receiving payment of cheque"

A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.

Explanation I - A banker receives payment of a crossed cheque for a customer within the meaning of this section notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof.

Explanation II - It shall be the duty of the banker who receives payment based on an electronic image of a truncated cheque held with him, to verify the prima facie genuineness of the cheque to be truncated and any fraud, forgery or tampering apparent on the face of the instrument that can be verified with due diligence and ordinary care.

 

Section 131A of Negotiable Instruments Act 1881: "Application of Chapter to drafts"

The provisions of this Chapter shall apply to any draft, as defined in section 85A, as if the draft were a cheque.

 

Section 132 of Negotiable Instruments Act 1881: "Set of bills"

Bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid. All the parts together make a set; but the whole set constitutes only one bill, and is extinguished when one of the parts, if a separate bill, would be extinguished.

Exception : When a person accepts or indorses different parts of the bill in favour of different persons, he and the subsequent indorsers of each part are liable on such part as if it were a separate bill.

 

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