Negotiable Instruments Act Section 128 — Payment in due course of crossed cheque

CHAPTER XIV O F CROSSED C H E Q U E S

General

Summary

If a bank pays out a crossed cheque properly and in the normal way, then both the bank that paid it and the person who wrote the cheque (if the cheque reached the intended payee) are treated as if they had paid the money directly to the true owner. This means they get the same legal protection and are in the same position as they would have been in if the payment had gone to the rightful person.

Official Text

Where the banker on whom a crossed cheque is drawn has paid the same in due course, the banker paying the cheque, and (in case such cheque has come to the hands of the payee) the drawer thereof, shall respectively be entitled to the same rights, and be placed in the same position in all respects, as they would respectively be entitled to and placed in if the amount of the cheque had been paid to and received by the true owner thereof.