= Case Study EXAMPLE OF CASE STUDY 1. a) Asa banker, how do you deal with the following cases 1) Acheque dated 10-6-2008 is presented for payment on 25-9-2008, 2) A cheque payable to Laxmi Food Products Ltd. is endorsed by Ramesh and presented for payment. 3) —Acheque cut into two pieces but pasted and is presented for payment a) wmosddonn me send xodweneg Bert AxwoxL0? 1) 10-6-2008 QrD08 BACH 288} 25-9-2008 dod Bra AomDedsg woman 2) 98, Se sadly Onoete oe Hompodseorbsog! tiga teotodaid Babes daloor! Brown ae RomMag wort , 3) 2882 ated down, eoay 08s, tmosdQ we Aommondy woman b) "State the relationship between a banker and a customer in regard to the following: 1) A Fixed Deposit Account 2) When the customer takes a cash credit 3) Purchase of Gold hall mark on behalf of a customer. b) éendaireg unoed adsy Mawes Sabet cine xovogred moemrdgss DowWITA BEAD. 1) Bogs sessed ang Beda 2) maaita motded arch sy citar 3) TASES admwA wormdd moo Bsr a DTeOmD=N. - (KUD May 2012) Ans: a) 1) It is a State cheque. Banker can not honour the cheque, because it is more than 3 months 2) Banker cannot honour the cheque because cheque is in the name of company. 3) Banker cannot honour the cheque. b) Y 1) Banks and customer (debtor and creditors) 2) Banker is a creditor and customer is a debtor. 3) Principle and agent. 2. Asabank how you deal deal in the following situations: Dew Wy eR,osTRON Se Benn tonweridg Ber ARwOAAS DowwaA} Se20. a) A customer of bank has kept his valuables for safe custody can you exercise a right of lien on valuables for the over due debt of the customer. tm ode Lay mated Bg we ensbe ayrieay ORION tm,obsQ aijeayd. v Stare shes mazes ws evedebal mowgn Rees mpiteatsa mya) edeocoortoamese? b) A Customer sent his cheque for collection, can you apply granishee order on that cheque? 4y TREN vegan Aeacwsmwh seeder & rigs toes Beep daies ei edainy woreexwabete?e Ans : (a) _Itis not valied case study eque of Rs. 15,000 b Beye 13 Jun ¢) J for payment on 15th May 2010. 10 is p tor Pog 01-06-2010 © A 15,000 28862 soz: eee p wm,c8hQ OS Barone. BRIM Ome8 5-05 da) An ‘account payee crossed cheque is pres i the counter sented for payment ove ang seran sig, Dow Seeders BS 88a a ‘ sori BART. 2 SOM wn,8e Powers @) Acheque ot Rs. 5,000 bearing date 31st April, 20 : payment on sth May 2010. |, 2010 is presented for 31-04-2010 gp ORRog BROHHA 5,000 Bord : ees ens 5-05-2010 docs enoer sutha@xcen. feng msUTEN Ome di (KUD May 2011) a) Banker cannot execrcise a right of lien. In this case, banker and customer Is relationshi ‘ ip is Bailee i b) Ifthe cheque is not collected banker cannot apply the Goh a order oo oc) Itisa post dated cheque. Banker cannot honour the cheque before the date. d) Banker cannot honour the cheque at the counter. However banker insist to the customer present through account. c) Banker can honour the cheque 3, Indicate what action you take as @ banker under the following circumstances. Give reasons. wn,o8ot en 3 BUNS somngenve, saTieRy e,8A8pA0- sorerien, 8020. a) When a cheque is written in pencil is presented ott tigay BROOD ge madwaATT. b) When" yer Nici’ is issued against your customer's account cds ado aed “ganoet eg” aQAoRN. c) Acheque dated 45-04-2002 presented for payment on 25-07- 2002. 15-4-2002 QaR08 Bone we 5-7-2002 dor Be Homey women. ‘one of your customers’ d) Whenyou receive a telephone call from give detail information about his ‘account to this assistant. moss mee sy sppbob UA BRED ay eae ganoneat penzes BOR eet pRosnssomnt ape . fe) ACheque dated 24th March. 2010s presented on 2018. siyestr 2010 dott) 24 apr, 2010 agnod B00 végey 23 ‘ox5- 1) gaucaancen. 23rd March,14 Case Stuy, (b) Suspend the operations of the customers account. It means not honour the cheques until the final order. (c)_ Its stale cheque. Hence Banker dishonour the cheque (d) Not to give the information (ce) Itis a post dated cheque. So banked cannot honour the cheque (KUD May 2010) banker 4. Answer the following a) Can a banker apply Garnishee order in the following cases? Gi ive reasons. i) A cheque sent to a Bank for collection. ii) A fixed deposit for 5 years. sens sone nVg we,o8cRd TNS oy werDodoTwIMS? dro B20, i) taj cteleenaran tose exoescnTt. ‘ ji) 5 Baleriy stools dears, b) What is legal position of a Banker when he honours i) Signature of drawer is forged. ii) Signature of the payee is forged eee agnvay TRUDZDEN wn,o8ON ‘MAE MRARA’ WH We. i) TRwes shots te SHAMN. . ii) aay IFa Bay xe awa@mn. c) Cana banker exercise a Lien on the following? Give reasons. i) Valuable kept for safe custody ii) Cash given to the banker for purchase of Satyam Company Shares. (KUD May 2009) di Sens Bomygsenvg w,o8SR AOA we tderpodorao?) BTL BOAO. i) tothe Busrlad oOLA te ewotos SxyTe ii) 8,0 BONS Secor DOCDBL? cmos Wes HQT. Ans: (a) (I) If the cheque is not collected before issuing garnisher order banker cann't apply the garnishee order On the contrary If the cheque 's collected before issuing garnishee order banker canapply the garnishee order () Banker can apply the Garnishee order. (b) (i) Negaligence of the banker, So he is liable to pay com| to customer. (©) (). Banker cannot exercise a lien. Because In this case banked is Bailee and custmer is a bailor (1), Banker cannot exercise lien. Beca' Trastee. 5. Can a banker exercise lien on the following. ieee SeARAMS Shes mova mB,QeesH Be,m, weRcUAANet a) Valuable duly packed and sealed kept for safe custo. 3 mote dom sytodd rownmyc “22 Baw B20 Uekaoa “magne. pensation use in this case banker iS— b) c) d) Cheques presented to bank for coll lection Braewemn wos say, ce, Cash given to the banker for purchase of infosys com) caamaeenn® sosinah seobri’s, mbedxer acl — Bev, DehAO OPT Baty, Fixed deposit jointly held by husband and wife payable to either or survivor. Snomaden on Rao weTos Mennon MAALTIAG BY Bechd BALA woh aoqs sess (KUD Oct 2002) Answer/Solution e) b) c) 4) 6. Smt. Renuka having current account in a sufficient credit balance to her regarding her habit her banker disclose he! Ores Serato 20} Zero ws AWOGIL BO ACAGIA, OD aoorkode No ie. banker cannot exercise lien. Because in this case the banker acts as a bailee and not as a banker. Yes i.e. banker can exercise his lien. Becaus them for collection as a banker. No Banker cannot exercise his Mi customer for a specific purpose, viz, company. Yes lien can be exercise’ e the banker receives en. Because cash is given by the to purchase the shares of infosys d as loan due to the husband. If it is self- acquired. bank, issues cheques without Banker has informed to her, ut credit balance and warned e same. Can the account. of issuing cheque withol not to issuing cheque, even then she continues th r dealing to her husband? give reasons. rane Ross, pO, moscseccier, Som MER, soon wareRy, Aebyge. wos BOD Oey Gens ene dH O8Q20Re Bamos ann aos gnombaOOsy. wROsTAD Os Beenwond ie 3,450RB asmod on g¢Awede? wOrNPey Ban vad © 2220. (KUD April 2004) Answer No Because banker has 7. Indicate the answer you the information of account to others. count, e confidence of the customer's a state the reasons for your the Banker cannot disclose to maintain th would give and actions in the following circumstances. argon, deci S82 ene, rmosos cones 3B send Hom edad aoc, wdou0. ' A) A cheque dated March, 2000, presented on ist April, 2000. dnege 9000 aoc nda 38a ogo ayer 2000 dod B) he m Seer 2000, presented on 45th June, 2000. oD > nda wan OF fo sew 2000 2 Bod we, 2000 a0 Dood awdssaacertee C) A cheque dated 3rd May, 2000, presented on 4th August anob soe 2000 aom KOT ey o> ena pon : se % 2000 tow MWOISGLATM om D) A cheque dated 11th June, 2000. presented on 12) 2000. *h Septembey, OO BAR 2000 HH BID eR oF OOF 96 Bork mo: mr Answer ae ou a) Date is incomplete. So banker cannot honour the cheque, Becauss specific date of issue is not mentioned. . b) It is a post dated cheque. Banker cannot honour the cheque. c) It is a stale cheque. Banker cannot honour cheque because, cheque is not valid after 6 months. In India cheques are valid for only 6 months. d) It is a stale cheque. Banker cannot honour the cheque because it is more than 6 months back dated cheque. 8. As a manager of a bank, who would you deal with the following cases Aey wade WORDS £0? 25-7-98. S Tomb Bes Tomaschs, b) A cheque payable to Computers Academy Ltd., is endorsed by Sri. R.S. Sheelwant, the secretary and same has deposited for collection to his personal account. BOMBS GEV Lod Oe Yorant. B wae Heae. secboat. c) A fixed deposit receipt of Rs. 5,000 payable to Basavraj on 1st July 1998 has been presented for payment on 15th May 1998. eek «ange s cock d) A cheque dated 31st May 1998 is presented for payment on 30th May 1998. : AOHOFES WOU Bead ue, 3 5 com Eee Rocnete, womert . (KUD April 99) Answer SS fee a) It is stale cheque. Ch is valid for 3 months. In this ca ) ue. Cheque i i que becomes is a lapse of case more than three months. stale cheque. Banker cannot honour the cheque. which b) Cheque is payable to secretary of Computers Academy Ltd. ds cannot be credited to the personal account of Sheelwant, tle Secrecase Study 17 Answer 9. Answer : a) b) 10. c) No payment is made before due dat te, so bank F on for payment before the maturity date. oe ) It is a post dated cheque. So banker 7 cannot honour the An open Bearer Cheque for Rs. 2,500.00 issued by Honest een favor of ran Mehtais presented for payment. The clerk at the counter points out the ate on the cheque inserted after i i ae wards and is in different The Cheque is otherwise in order in all respects. Will it be in order for the bank to pay for the cheque? Explain. (KUD Oct 1999) exes, 80, Oder, ambod Qe MamA How exon sade 3 2,800 Ba Geds 280, (Bearer Cheque) 223,088 anc neantcag ANOsorod, We NOVO. Demos HOTA, wed sdrcos wedodad 8,007 Qmose gogo xeOseRADS Dow eosay Ronogay, WATT o88, Woda. ead g a, WQso Of ANHBOMAD WHE ROOBADD. 20 38,2 (KUD) a a) Banker cannot pay the cheque because (1) It is open cheque. When name is mentioned, it should be crossed. (2) The alterations are made, without permission of the drawer. a) cheque of Rs. 20,000 which has been crossed originally carried below the crossing, words ‘crossing cancelled’ and signed by the drawer is presented for payment at the counter. As 4 banker, what actions will you take? Explain. b) Prof. Chidanand presents for encashment as uncrossed cheque of Rs. 50.00 payable to him or ‘bearer’ and refuses to endorse the cheque. (i.e. refuses to sign on the back of the cheque). As 2 banker ‘what action will you take? Explain. (KUD April 1988) and signed by the drawer, ented at counter. In No doubt when the crossing is cancelled it the chequethrough Banker has to pay the amount. But cheque is pres such cases banker requests the customer to presen| proper channel. Banker cannot honour the che endorse the cheque. Indicate what action y que, because the customer refuses to jou take as a banker under the following circumstances. i) When ‘order Nisi’ is issued against your customer. : ii) Whena customer applies for a loan against his fixed deposit ioe iii) When a cheque payable to “Nad raders Limited" is presented by tr e company's secretary under his simple endorsement to be collecte’ and credited to his personal account. iv) When your customer iS declared as insolvent.18 2) Case Study Give correct form of Endorsements in respect of the following payegs.. a) M. Kuberappa (illiterate person) b) Professor R.S. Kanade and Doctor Mrs. Seeta Laxmi Karant. c) Income Tax Officer, Karwar. d) J.G. Swami Memorial Hospital, Hubli. (KUD Oct 1987) Answer 1) 2) 3) 4) WW. Banker immediately informs the customer and the cheque presenteg after receiving order Nisi is not accepted. Banker can sanction the loan against FDR. In this case, it is the banker's mistake, because funds belonging to the company should not be credited to personal account. For this purpose banker has to pay the compensation to the companies. For insolvency, banker has to receive notice from the court. Then after the banker follows the court instructions. a) K. Kuberappa Thumb impression witness by Nagu. b) For Sheeta Laxmi Karant R.S. Kanade Director c) ITO Karwar d) For J.G. Swami Memorial Hospital Hubli 1) A customer has two current accounts in a Bank, one showing Rs. 5000 as credit balance and the other overdrawn to the extent of Rs. 5400. A garnishee order is issued against the customer. What is the eee position? ckeon0g, Lae nes eas. wom 2 SG0o Wastin wae & i a H,voO TAMeLNe Beedn dea, Wd. mss Od “Ens oe” chm, Badaxenna. a Romie se, wmosox me “ Rot mss Ost, woth sage B 2) Indicate what action you will take as a Banker under the following circumstances : seas aR QSNE, “eRCIS” SA ana gobo 3e2 2,00 eo, ADL, (eters 50H) co i) When the cheque is crossed with the words “Not Negotiable". “BmoBoMe aon sands pow ue, te trae Teaco sebane 2 ") When the cheque is specially crossed to more than one Bani Wowses Buh, cRosriert SBR cdeRy desw08eslase Suny 19 answer 1) panker cannot, apply the garnishee, ord Because customers account is alread Peace Be (6400-5000) ly overdrawn to the extent of As. 2) }) It is restricted for further transfer. Th ae ie holder is entitled to receive the It is called double crossing. When |. the banker receives tt cheque and sent to another banker for collection. So ae a cross the cheque. It is called double crossing, paying banke = pay the amount. lea In the body of a cheque, the words, Rupees Seventy-nine twenty-two paise, are written while the figures read Rs. 71.22. How should the paying banker deal with such a cheque on presentation? b) What action should a banker take on presentation of a cheque cut into pieces pasted together? c) HK. Mane, a Director ‘of Shreedevi Mills Ltd., is authorised to operate the current account of the company with Syndicate Bank, Belgaum. He had also a personal account with the same bank. The manager of the bank has collected and credited to the personal account of the y- drawn in favour of the company: ii) 42. a) director a cheque for Rs. 5000/ What are the legal implications on the action of the banker? (KuD April 1986) in words and Answer a) Banker has to dishonour the cheque stating that amount i figures differs: b) Banker has to ke of the banker. \ds belonging to the company dishonour the cheque. r. Hence bank manager c) Itis the mistal Because fun cannot be credited to personal account of Directo! is liable to pay the compensation to the company. the banker should pay * io Firm when 43. a) State with reasons, whether eer cheque issued by one pal i it another partner instructs him ntermand tS payment. : ii) A cheque crossed "Not Negotiable payee. b) Mr. G.S. Kumar has Rs. 925/- to a bank. There of his cheques for Rs- . C a ime for encashment. O21 A were presented at the atten shortage of credit balance er (banker) to coul "and endorsed to & second his credit in his current account with /., RS. 450/- dishonour all the cheques Explain. : ; i c) Can a banker exercise his lien in the rd ca’ i) Seated box deposited for safe custody: for collection: (xuo ot 4986) ii) A cheque sent20 Case Study Answer a) i) Banker cannot pay the amount. Because another partner instructs the banker to countermand its payment. ii) In case of ‘not negotiable’ cannot be transfered to another person, When it is endorsed to a second payee banker cannot pay the amount. b) A Total amount of all the three cheques would be Rs. 950. Therefore banker cannot pay all the three cheques. However banker can make payment of two cheques, viz., a cheque of Rs. 400 and a cheques of Rs. 450. ©) i) Banker cannot exercise right to lien in this case because banker is bailee. il) Banker can exercise his right of lien. 14. As the Manager of a branch of a bank how will you act under the following circumstances : a) In the body of the cheque the words "Rupees five Hundred Ninety" are written, while the figures read as Rs. 519. b) A cheque issued by one partner of a firm when another partner instructs you to countermand its payment. ©) A cheque presented for payment after you have received intimation of the death of the drawer in the meantime. d) Miss Tara Bhat presents for encashment an uncrossed cheque payable to her or bearer and refuses to endorse the cheque. (KUD Oct 1985) Answer a) Banker dishonours the cheque stating that amount differs in words and figures. b) Banker cannot make payments. c) Banker should dishonour the cheque. 15. Give the correct form of endorsements in respect of the following pages: i) Dr. RR. Nadkarni, M.D. ii) Sir Jonn Payes iii) Mrs. Laxmi Prasad and Miss. Suhasini Patil iv) Mrs. Worshipful Mayor, Hubli-Dharwar Municipal Corporation. (kup) Answer i) RR. Nadkarni ii) John Payes iii) Laxmi Prasad and Suhasini Patil iv) For Hubli-Dharwad Municipal Corporation Sd- ; Mayor of Hubli 16. Indicate how the banker should deal in the following cases. Give reasons for your answers.aens Rowe NneO, 30% grgorien 00rd Baud. a) b) c) a) Answer b) °) qd) e) f) 17. a) sOx> Bert Tteoaeiedous my ARAL, 7 Cheque dated... February 1980 presented for payment on tet Ay a 8t April 1980. Bwywo OFSO HOW OMOIWIG WIR, ome ager o diye som wrod seernh MBIBWANG. Cheque containing the amount different in words and figures. om 3c@, dd dss egorieg, sey See sedaimnaen. z . A crossed cheque was presented for payment by the payee by cancelling the crossing and requesting the banker to pay cash a counter. Bacen dedroe, 34808 Benes deaiivsh, Asse saci amt, Bro somos! etm, maTHeA, wmosdan eco Brow, saso> Bacds Bnadeowert. A drawer of a cheque telephones to his banker to pay cash on a particular crossed cheque. 24,8 dasRD, 33, eaosdan Badmedod seos selAO4, wom aara, dae Beam, saBor aeatmn. A cheque is written in pencil. 0rd 238,52, Badacd wdad mMOOSAATAN. A payee of a D/D reports that he has lost the D/D and requests the banker to issue a duplicate. arinod BPs mAzsranne sa me, 7m wBacnciodors ben, enoscan ead a> aecbay neden scesayTe (KUD Oct 1980) Date is incomplete so banker cannot make payment. When the amount in words and figures are different banker dishonours the cheque. No doubt, crossing is cancelled by payee. But it is not confirmed signature. So banker cannot pay the amount. A cheque telephone is not accepted. It is not valid. Banker can issue duplicate DD by obtaining ide bond. A customer has a credit balance of Rs. in your branch. Three cheques for Rs. 1 . are simultaneously presented for payment through clearing: would you act in this case? no oan? ab, mand, massacre end, sno9, 700 Soe Bes Ben, WS. GBD 29083 0,800 Bp.ne, 0900 Tr ae, 500 dang? a200d dared, *gos0or” conn ocd gened, maosanend. Rontseag, 5 ayxsomg20? with menity guarantee 2,000 in his current account 500, Rs.1,200 and Rs. 8 How18. a) c) 19. a) A cheque drawn on your bank ee a Cite a helene eed Te lengua of the region whee including the amount in words I th re ‘ce is located. The signature of the drawer on the cheque are att specimen on your records. Would you pay the cheque Give reasons for your answer. (KUD Apri 127 banker honours two cheques for a stranger. After Five days of payment it is discovered that the drawer's Saal one and the payee's endorsement on the other are forgered What is the position of the banker who cashed the two cheques? exodus mOBaAd av union mC Brose Baym, amd Oard soso wom 480 UR, SIGHS shee xy, addqondd, mass ; X drew a cheque for Rs. 3000-00 on his banker, Shivaji Bank Ltd in favour of Z on 1st Jan. 1974 and gave it to him on the same day, The cheque was presented for payment on 10th June 1974. In the meantime, during May 1974 the bank had failed. Discuss the legal position of X, the banker and Z. “3 wD “DBeew mos’? shed “w"” ar Aensos Ooorey Dorm Be. 2,000 ob dv nim ede OS ean saym. SB WeR Brwomcbs,A co-e-of2y ToD. woe MOBIBAAO MIS. SHS H0I5,G, orev she Sond, wow ORWEAMOOBOSS. Bi MASI g" doves mow sha “w" a0 mAmss AQSdAT ori QTOAO. Shri. N.R. Patel sends a crossed cheque on Canara Bank for Rs. 3000 to his banker Vijaya Bank for collection and crediting it to his Personal account. It is however found by Vijaya Bank that the cheque was drawn by P.R. Das payable to its customer, M/s. Nanavati and Company where Mr. Patel was employed as an accountant. How should Vijaya Bank deal with it, as a collecting bank? MadmIS cmmoorid semmoss BQ Oe aw.go*. Teo HW HB sz BROT Dead most sx sober an3h ae ; es © BAR d.vo%. mx aomad Roses oo MSS. sb mma wrchd, BOTS ePowosondzdons 5D SRA FO 2 Awd most seangsd. “BERS MRF" MIG Dea oo od eat Rewomiene eee. Mod & UES dalodé, 2 il 1976) Rs. 50,000 is presented (KUD Apri and paid reducing the customer's balaf to Rs. 20,000. Two days later, a cheque dated September 23 fo! ue di an but it returned mark legal Position of the banker in this eevee ed N/S Discuss the leg