What is Section 131 of Negotiable Instrument Act?

What is Section 131 of Negotiable Instrument Act?

—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.

What are the condition for availing statutory protection available to a banker under section 131 MCQ?

6:- What are the conditions for availing statutory protections available to a banker under section 131: The payment is received for a customer of the Bank. Cheque is crossed generally or specially before it is presented to the paying bank. Banker has in good faith and without negligence received payment.

What is obliterated cheque?

(1) ] Where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered, or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated, payment thereof by a person …

What are the statutory protection of collecting banker?

Statutory protection is available to a collecting banker when he receives payment in good faith and without negligence. The phrase in “good faith” means honestly and without notice or interest of deceit or fraud and does necessarily require carefulness. Negligence means failure to exercise reasonable care.

What is the most important feature of negotiable instrument?

The most important feature of negotiable instruments is the accumulation of secondary contracts asthey are transferred from one person to another. Once an instrument is issued, additional parties canbecome involved.

What is not negotiable crossing?

Not Negotiable Cheque Crossing It is when the words ‘Not Negotiable’ are written between the two parallel transverse lines across the face of the cheque in the case of general crossing or in the case of special crossing along with the name of a banker.

Which of the following condition must be complied with to avail protection by collecting banker under the Act?

The collecting banker must have acted in good faith. Here ‘good faith’ means banker had no reasonable ground to believe that the customer is not entitled to receive payment of the amount therein mentioned. The collecting banker should have acted without negligence.

Which is the safest form of crossing in cheque?

Explanation: In Account payee crossing the amount will not be paid to anybody over the counter. It will be credited to the account of the payee only. Thus account payee crossing ensures safe transfer of funds.

What is cross cheque?

A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. Therefore, such checks cannot be immediately cashed by a bank or by any other credit institution.

What is the difference between paying banker and collecting banker?

As paying banker, a banker pays cheques that are drawn upon him by his customers or by arrangement upon another branch by customers of that branch. As collecting banker, he collects the proceeds of cheques drawn on other bankers and branches which have been paid in by customers for the credit of their accounts.

Which section of NI Act gives protection to the collecting banker?

Section 131of NI Acts 1881
The protection available to the collecting bankers under Section 131of NI Acts 1881 only when following conditions are satisfied by the collecting banker. The check should have been crossed generally or especially to the bank.

Why is a Cheque called a negotiable instrument?

There are many documents which are required for these transactions. These documents are used for transactions as well as transferring from one person to the other. Thus, these documents in business terms are called the negotiable instrument.

When can a notice under Section 131(1A) be issued?

There was a case handled by the Gujarat High Court, in which the court has mentioned that notices under section 131 (1A) can be issued after the relevant searches have been completed that was undertaken under the provisions of section 132.

What is section 131(1A) of the IPC?

Section 131 (1A) works with empowering the officers related to the investigation wings. The notice under section 131 (1A) can be used even if there is no proceeding pending.

What does section 131 of the USCIS code mean?

U.S. Code § 131. Certain foster care payments. Gross income shall not include amounts received by a foster care provider during the taxable year as qualified foster care payments. a difficulty of care payment.

What to do if you are summoned under Section 131(1A)?

To begin with, a notice under Section 131 (1A) is very common nowadays, which means there is not much to fuss about. The first thing you must do is to keep all the summoned documents ready. What you must be careful is not to ignore such notice, and if you have been asked to be present physically, make sure you do.