Multiple choice

A popular bank makes payment to Y, of a bearer crossed cheque across the counter. The cheque is drawn in favour of X. In this case,

  1. the bank is liable to the drawer for a wrongful payment

  2. being a bearer cheque, the bank can make cash payment to anyone

  3. the bank is liable to X, the true owner

  4. the bank is liable both to the drawer and the true owner

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

Bank is always liable to the person whomsoever the check is favourable to, not the bearer. Thus, in the given case, the bank is liable to X.