Cheque payable to order
Full Text
Cheque payable to order.—
(1) Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.
(2) Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict or exclude further negotiation.
Plain English Summary
Protects the paying banker by discharging them upon payment in due course for order cheques with forged endorsements and original bearer cheques.
Key Legal Elements
- Drawee bank is discharged by payment in due course on order cheques purporting to be endorsed by payee
- Protects banks from liability if the payee's endorsement is forged, provided the bank acted in good faith and without negligence
- Originally bearer cheques remain payable to bearer regardless of any subsequent endorsements (once a bearer, always a bearer)
Practical Note
Statutory protection for banks against forged endorsements. A banker cannot verify signatures of all endorsers in a clearing system. Under sub-section (1), if the bank pays in due course, it is protected even if the endorsement turns out to be forged. Sub-section (2) reinforces 'once a bearer, always a bearer' for cheques.
हिंदी पाठ
आदेश पर देय चेक।—
(1) जहां आदेशानुसार देय (payable to order) किसी चेक पर आदाता (payee) द्वारा या उसकी ओर से पृष्ठांकित होना प्रतीत होता है, वहां आहारी (बैंक) यथाविधि भुगतान (payment in due course) द्वारा दायित्व से मुक्त हो जाता है।
(2) जहां चेक मूल रूप से वाहक (bearer) को देय होना व्यक्त किया गया है, वहां आहारी (बैंक) उसके धारक को यथाविधि भुगतान करके दायित्व से मुक्त हो जाता है, भले ही उस पर पूर्ण रूप से या निरंक रूप में कोई भी पृष्ठांकन क्यों न हो, और भले ही ऐसा कोई पृष्ठांकन आगे परक्रामण को प्रतिबंधित या वर्जित करता हो।