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Section 131: Non-liability of banker receiving payment of cheque.

The Negotiable Instruments Act, 1881Central Act · Act 26 of 1881

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.

[Explanation [(I)].-- A banker receives payment of a crossed cheque for a customer within the meaning of this section notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof.]

[Explanation II.-- It shall be the duty of the banker who receives payment based on an electronic image of a truncated cheque held with him, to verify the prima facie genuineness of the cheque to be truncated and any fraud, forgery or tampering apparent on the face of the instrument that can be verified with due diligence and ordinary care.]

Where this provision sits

ActThe Negotiable Instruments Act, 1881
Section131
Marginal noteNon-liability of banker receiving payment of cheque.
JurisdictionCentral
StatusIn force as published by the source
Judgments citing it9

How this provision has been amended

Taken from the footnotes printed with the provision by the source. Where a footnote names the amending instrument, it is quoted as printed.

  • inserted, Act 18 of 1922. . Ins. by Act 18 of 1922, s. 2.
  • renumbered, Act 55 of 2002. . Explanation re-numbered as Explanation I thereof by Act 55 of 2002, s. 6 (w.e.f. 6-2-2003).
  • inserted, Act 55 of 2002. . Ins. by Act 55 of 2002, s. 6 (w.e.f. 6-2-2003).

Judgments that turned on this provision

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