Question

Banker
In which of the following cases, the banker MAY refuse to honour the cheque?
(I) When the cheque's legality is doubtful.
(II) When the customer has given notice of assignment of the credit balance of his account.
(III) When the cheque is presented at a branch where the customer has no account.
(IV) When the holder's title is defective and the banker comes to know of it.
Select the correct answer from the options given below -

• A. (II) & (IV)
• B. (I) & (III)
• C. (IV) & (I)
• D. (III) & (II)

Answer 1

Answer: (B)

(I) & (III)

In the following cases the banker may refuse to pay a customer’s cheque:

(a) When the cheque is post-dated.

(b) When the banker has not sufficient funds of the drawer with him and there is no communication between the bank and the customer to honor the cheque.

(c) When the cheque is of doubtful legality.

(d) When the cheque is not duly presented, e.g., it is presented after banking hours.

(e) When the cheque on the face of it is irregular, ambiguous or otherwise materially altered.

(f) When the cheque is presented at a branch where the customer has no account.

(g) When some persons have joint account and the cheque is not signed jointly by any or by all the survivors of them.

(h) When the cheque has been allowed to become stale, i.e., it has not been presented within six months of the date mentioned on it.