Multiple choice

A bank makes payment of two cheques on which, later it is found that the signatures of the drawer are forged. The first account is that of a company and the 2nd account is a joint account in which signatures of one of the account holders are real.

  1. Bank is liable for the first cheque and for half the amount in the 2nd case.

  2. Bank is liable for both the cheques.

  3. Bank is liable for the 1st cheque and not liable for the 2nd cheque.

  4. Bank is not liable for any of the cheque, if payment is in due course.

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

The National Commission held that the bank couldn't escape responsibility in comparing signatures. Thus, in both the given cases, the bank is liable for both the cheques.