Banking · Negotiable Instruments Act
The term 'Payment in Due Course' under the Negotiable Instruments Act, 1881, is defined as a payment that is made honestly and without negligence. Which of the following is an example of Paying Banker's Negligence that would vitiate the protection?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Paying a cheque presented by the payee who is not known to the bank.
- 2Paying a cheque where the date is overwritten but the amount is correct.
- 3Paying a cheque for an abnormal amount for a new customer without making inquiry.✓
- 4Paying a cheque after the customer has countermanded payment through a reliable email.
Correct answer
Paying a cheque for an abnormal amount for a new customer without making inquiry.
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