Business Law Today Study Set 1
Quiz 21 :
Checks and Banking in the Digital Age
Cheque has been not been negotiated with Mr F but as it is with Mr F which is similar to negotiation. Mrs E must have informed the Company FT so that they would have stopped the cheque. Which she did not and so the cheque has been cashed by the Mr F. The cheques have been cashed from the account of company and hence they will not issue the other cheque to Mrs E. There is no fault of the company.
Cashier's Checks A Check involves three parties - Maker (Issuer), Drawer bank, and Drawee Bank. Checks which have specific payee are called Cashiers Check. Sometimes in cashier checks Drawee and Drawer can be same. Example - Bank issue check to itself. A Certified Check Sometimes a drawer or payee can ask from the bank to certify check of some amount. Bank will immediately transfer funds from payee to its own certified account and puts a stamp on the cheque indicating "Certified" and the amount on the front of the cheque. It means that bank has accepted the check in advance and ready to pay when the check will be presented for payment in drawee bank. Bank immediately transfer the amount from the certified account. Drawee Bank can not deny payment in this type of cheque.
Bank has to re-credit the amount to the customer. 1. Here on April'13 issue was raised by Mrs S but there was call on May'26 that bank personnel were unable to locate the error but will continue to locate it. That means the investigation was continuing after the May'26. Where as EFT law states that bank has to investigate the case with in 10 working days and if unable to do so then amount in question will be re-credited to customer account. 2. Also EFT act states that such issues should be resolved in 45 days from the date of the complaint. Issue was raised on Apr'13 and bank finally responded with facts on Jun'20 which also exceed 45 days limit. It states that such errors should be investigated promptly and resolve in 45 days.' Check transfers will not be covered by EFT Act. EFT covers ATM transactions and POS transactions also the fund. It's a check process which may have been cleared electronically will not be covered in EFT act and so if bank could provide the evidence of check payment to department store then Bank will not be liable to re-credit the amount to the customer.