Law · Legal Aptitude
Mr. Dev issues a self-cheque, leaving it blank in the hands of his clerk, Mr. Gopal, with oral instructions to fill the payee's name later. Mr. Gopal wrongfully fills in a fictitious name, M/s. Phantom, and raises the amount to ₹1,00,000 (a material alteration). The bank pays it without negligence. Under Section 89 of the NI Act, what is the correct outcome?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Impact: Bank is protected; Debit Amount: ₹1,00,000; Governing Section: Section 127
- 2Impact: Bank is protected (if the alteration is not apparent); Debit Amount: ₹1,00,000; Governing Section: Section 89✓
- 3Impact: Bank is protected; Debit Amount: ₹1,00,000; Governing Section: Section 85
- 4Impact: Bank loses protection; Debit Amount: ₹10,000; Governing Section: Section 89
Correct answer
Impact: Bank is protected (if the alteration is not apparent); Debit Amount: ₹1,00,000; Governing Section: Section 89
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