Section 129 of NIA : Section 129: Payment Of Crossed Cheque Out Of Due Course

NIA

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Explanation using Example

Imagine John issues a cheque to pay for his new laptop. He crosses the cheque and writes "Pay to the order of TechStore Ltd. only" to ensure that only TechStore Ltd. can cash it. If John's bank mistakenly pays the cheque to someone other than TechStore Ltd. or another bank collecting on behalf of TechStore Ltd., John's bank would be responsible for any financial loss John suffers because of this error. This application of Section 129 of The Negotiable Instruments Act, 1881, is to protect the true owner of the cheque and ensure that crossed cheques are handled correctly by banks.

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