Question

Banker
In which of the following cases, the banker MUST refuse to honour the cheque?

• A. When the banker receives notice of customer's insanity.
• B. When the cheque has been allowed to become stale.
• C. When the cheque is ambiguous or otherwise materially altered.
• D. When the banker has no sufficient funds of the drawer with him.

Answer 1

Answer: (A)

When the banker receives notice of customer's insanity.

Following are the circumstances when a banker refuse payment of Cheque:

• When the customer has countermanded payment.
• When the banker has received a garnishee order.
• When the customer has died.
• When the customer has become insolvent or insane.
• Where the banker has received a notice of assignment.
• When the customer has lost the instrument
• When the banker has come to know of any defect in the title.
• Where the instrument has been materially altered.
• When the account is closed