Multiple choice

Bank’s obligation to pay the cheque drawn by the customer u/s 31 of NI Act exists in which of the following circumstances?

  1. When the cheque is presented by the drawer after business hours

  2. When the cheque is reported to be lost and confirmation from drawer is still awaited

  3. When garnishee order has been received cheque through clearing is debited but clearing returning time has not lapsed

  4. When the cheque clearing time has not lapsed and the amount of funds in the account is sufficient.

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 31 Liability of drawee of cheque — The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required to do so, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default. 

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