Law:

Section:

(a) Negotiable Instruments Act (XXVI of 1881)---Ss. 4, 5, 6, 118, 123-A, 124, 129 & 130--- Civil Procedure Code (V of 1908), O. XXXVII, R. 2---Suit for recovery of money on basis of dishonoured cheque or dishonoured crossed-cheque---Maintainability---Cheque being a negotiable instrument, thus, bank would be bound to place into account of payee amount indicated thereon when collected and not into any other account---When cheque was dishonoured, then its payee could sue its drawer and get decree against him for recovery of its amount---Cheque, if crossed "account payee", would cease to be negotiable and banker collecting its payment would be bound to put same in account of its payee---Provisions of 0. XXXVII, C.P.C., would apply to all bills of exchange whether negotiable or not---Suit upon a cheque crossed "account payee" would be maintainable under O.XXXVII, C.P.C.---Principles. According to provisions of sections, 4, 5, 6, 118 and 123 of Negotiable Instruments Act 1881, a cheque is a negotiable instrument, which may be negotiated, and the Bank has the duty to place into the account of payee the amount indicated on the cheque when collected and not into any other account. However, so far as crossed cheque is concerned, the same is to be dealt with under specific provisions like sections 123-A, 124, 129 and 130 of the Negotiable Instruments Act. When a cheque is dishonoured, the payee can sue for an action for the payment of amount of cheque from its drawer, meaning thereby that if a person gives a cheque for the amount due to be presented at a certain bank on a certain date, and if a cheque is dishonoured on presentation, a person can sue for consideration and get the decree for recovery of that amount in his favour. A cheque is a negotiable instrument resembling a bill of exchange, but entirely different, in the ordinary course, it is not intended for a circulation, but it is meant for the payment to the person on whose name the said cheque was made. Section 6 defines the cheque as a "bills of exchange" drawn on a specific bank and not expressed to be payable otherwise than on demand. The drawer must be a person, who enter into the contract and should be…

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