A cheque is drawn payable to “Y or order”. It is stolen and the thief forges Y’s endorsement and en…
A cheque is drawn payable to “Y or order”. It is stolen and the thief forges Y’s endorsement and endorses it to Z. The banker pays the cheque in due course. Can Y recover the money from the banker.
Jeeba Aug. 16, 2018
According to Section 85, the drawee banker is discharged when he pays a cheque payable to order when it is purported to be endorsed by or on behalf of the payee. Even though the endorsement of Mr. Y is forged, the banker is protected and he is discharged.
The true owner, Y, cannot recover the money from the drawee bank.
