Announcement

Collapse
No announcement yet.

Invalid cheque... Was the bank wrong in paying this cheque?

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

  • Invalid cheque... Was the bank wrong in paying this cheque?

    My bank payed a payees account cheque to the payee whereupon i had written a two line note on its forefront that that cheque needed my prior permission before payment after performance of a certain contractual between me and the payee or holder of cheque. Despite this noting on the face of cheque the name, amount, date, signatures were mine. Fyi I had issued that cheque for an approx amount as indemnity , receipt only to make it non negotiable until the payee completed the contractual conditions and in case i died he could claim the amount frm my successors by showing them the cheque n fulfilment of contractual obligation on him accordingly. Moreove, since the payee needed time to complete the deal he asked for a '''claused'' cheque as some proof and it was agreed that after completing contractual terms the payee would return me that cheque n that i would issue him a new cheque after adjustment of account which could be more or less than the approx amt fr which the impugned cheque was preliminary issued. Now the question is 'Was the bank wrong in paying this cheque n what remedy do i have to reclaim it from my bank?
    The payee has been overpaid n i suspect him to collude with someone in bank who passed this suspicious,invalid cheque with clear noting on its forehead.

  • #2
    Re: Invalid cheque... Was the bank wrong in paying this cheque?

    I wish to inform you that cheque is unconditional order to pay thus clearing a conditional cheque can be argued by you as negligence of bank. In this regard you can file a complaint with FTC for negligence in service. You can also file a lawsuit to recover your loss against bank and other person.

    AFF

    Comment


    • #3
      Re: Invalid cheque... Was the bank wrong in paying this cheque?

      You need to consult your contract with the bank. It is likely they disaffirm responsibility for additional agreements beyond basic endorsement protections.
      Due to a recent promotion, I should now be referred to as Major Obvious.

      I would not be trying to provide information and knowledge if I did not sympathize.

      Some days it is just not worth chewing through the restraints to face life.

      Comment


      • #4
        Thanks AAF, your comments are sound/logical. Do you advise me to complain to the central or the state bank as it is called in Pakistan??

        Originally posted by AFFA View Post
        I wish to inform you that cheque is unconditional order to pay thus clearing a conditional cheque can be argued by you as negligence of bank. In this regard you can file a complaint with FTC for negligence in service. You can also file a lawsuit to recover your loss against bank and other person.

        AFF

        Comment


        • #5
          thanks, i have no special rule applies to my contract with my bank with whom i hold a savings account. Hence general banking rules apply. I am sure my bank or any bank here will not pay against such a cheque.

          Originally posted by Disagreeable View Post
          You need to consult your contract with the bank. It is likely they disaffirm responsibility for additional agreements beyond basic endorsement protections.

          Comment


          • #6
            Re: Invalid cheque... Was the bank wrong in paying this cheque?

            You are confusing a savings account with a checking account. All banks have rules specific to their services.
            Due to a recent promotion, I should now be referred to as Major Obvious.

            I would not be trying to provide information and knowledge if I did not sympathize.

            Some days it is just not worth chewing through the restraints to face life.

            Comment


            • #7
              Re: Invalid cheque... Was the bank wrong in paying this cheque?

              Originally posted by mazBut View Post
              My bank payed a payees account cheque to the payee whereupon i had written a two line note on its forefront that that cheque needed my prior permission before payment after performance of a certain contractual between me and the payee or holder of cheque. Despite this noting on the face of cheque the name, amount, date, signatures were mine. Fyi I had issued that cheque for an approx amount as indemnity , receipt only to make it non negotiable until the payee completed the contractual conditions and in case i died he could claim the amount frm my successors by showing them the cheque n fulfilment of contractual obligation on him accordingly. Moreove, since the payee needed time to complete the deal he asked for a '''claused'' cheque as some proof and it was agreed that after completing contractual terms the payee would return me that cheque n that i would issue him a new cheque after adjustment of account which could be more or less than the approx amt fr which the impugned cheque was preliminary issued. Now the question is 'Was the bank wrong in paying this cheque n what remedy do i have to reclaim it from my bank?
              The payee has been overpaid n i suspect him to collude with someone in bank who passed this suspicious,invalid cheque with clear noting on its forehead.
              I'm confused here. How is it that the bank is supposed to know what conditions must be satisfied by the payee prior to being able to cash the check? And how would the bank know whether or not these conditions have been met prior to the payee presenting the check to be cashed/negotiated through the bank?

              The bank is not a party to whatever contract existed between you and your payee. All they know is that a check was presented to them to be cashed. In that respect, the bank cannot be held liable for your payee not satisfying whatever conditions existed for them to receive the benefit of the funds from that check as written.

              Any issue you have with an overpayment are strictly between YOU and the person to whom the check was issued. The bank has nothing to do with it.
              "If it ain't in writing, it never happened."
              "A lack of planning on your part does not constitute an emergency on my part."
              "You can never make the same mistake twice, because the second time you make it, it's not a mistake, but a CHOICE."

              Comment


              • #8
                Thanks but wasn't the bank supposed to abide by the banking laws universally in vogue which renders invalid any cheque with substantial additional remarks/notings on its forehead? Here, scibbling on even a currecy note makes it invalid. Similarly, a cheque too is a negotiable instrument n any suspicious noting on it should make it invalid or at least suspicious for bank to pay without referring to the payer/drawer,moreso when the account is of a savings nature.


                Originally posted by sandyclaus View Post
                I'm confused here. How is it that the bank is supposed to know what conditions must be satisfied by the payee prior to being able to cash the check? And how would the bank know whether or not these conditions have been met prior to the payee presenting the check to be cashed/negotiated through the bank?

                The bank is not a party to whatever contract existed between you and your payee. All they know is that a check was presented to them to be cashed. In that respect, the bank cannot be held liable for your payee not satisfying whatever conditions existed for them to receive the benefit of the funds from that check as written.

                Any issue you have with an overpayment are strictly between YOU and the person to whom the check was issued. The bank has nothing to do with it.

                Comment


                • #9
                  Re: Invalid cheque... Was the bank wrong in paying this cheque?

                  Originally posted by mazBut View Post
                  Thanks but wasn't the bank supposed to abide by the banking laws universally in vogue which renders invalid any cheque with substantial additional remarks/notings on its forehead? Here, scibbling on even a currecy note makes it invalid. Similarly, a cheque too is a negotiable instrument n any suspicious noting on it should make it invalid or at least suspicious for bank to pay without referring to the payer/drawer,moreso when the account is of a savings nature.
                  If the payee and amount of the check were clearly identifiable, then the extraneous writing is of no consequence. The pertinent information was there, and the check was paid based upon it.
                  "If it ain't in writing, it never happened."
                  "A lack of planning on your part does not constitute an emergency on my part."
                  "You can never make the same mistake twice, because the second time you make it, it's not a mistake, but a CHOICE."

                  Comment


                  • #10
                    Re: Invalid cheque... Was the bank wrong in paying this cheque?

                    Originally posted by sandyclaus View Post
                    If the payee and amount of the check were clearly identifiable, then the extraneous writing is of no consequence. The pertinent information was there, and the check was paid based upon it.


                    I am not sure about it because the banks here refused other cheques so marked. The banks are strictly bound to follow the banking laws which forbids them to pay suspicious cheques.
                    Will appreciate if you could possibly post a case law/citation .bank rule to substantiate your view?

                    Comment


                    • #11
                      Re: Invalid cheque... Was the bank wrong in paying this cheque?

                      You are the one suggesting that there is some law to prohibit cashing a check that has extraneous markings. State the law of which you speak. Absence of a law making it illegal, it would be considered legal.

                      The placement of the extra writing doesn't make the check suspicious. As stated, if the required elements of the check are present and discernible, the bank can and will cash the instrument.
                      "If it ain't in writing, it never happened."
                      "A lack of planning on your part does not constitute an emergency on my part."
                      "You can never make the same mistake twice, because the second time you make it, it's not a mistake, but a CHOICE."

                      Comment


                      • #12
                        Re: Invalid cheque... Was the bank wrong in paying this cheque?

                        Originally posted by sandyclaus View Post
                        You are the one suggesting that there is some law to prohibit cashing a check that has extraneous markings. State the law of which you speak. Absence of a law making it illegal, it would be considered legal.

                        The placement of the extra writing doesn't make the check suspicious. As stated, if the required elements of the check are present and discernible, the bank can and will cash the instrument.
                        I don't know what is the generally accepted law for paying out scribbled checks? But here in Pakistan you have to submit a copy of your National Identity Card even if you want to deposit money with the bank!
                        If acceptance of scribbled checks was legal the banks would not refuse accepting them now....
                        I think this subject has to be further researched because even if all the elements of a check are right but the check leaf is scribbled with some note on it the bank ought not to pay it for it being a doubtful and abnormal check.

                        Comment


                        • #13
                          Re: Invalid cheque... Was the bank wrong in paying this cheque?

                          Originally posted by mazBut View Post
                          I don't know what is the generally accepted law for paying out scribbled checks? But here in Pakistan you have to submit a copy of your National Identity Card even if you want to deposit money with the bank!
                          If acceptance of scribbled checks was legal the banks would not refuse accepting them now....
                          I think this subject has to be further researched because even if all the elements of a check are right but the check leaf is scribbled with some note on it the bank ought not to pay it for it being a doubtful and abnormal check.
                          By all means research it. We have advised you the bank is not getting paid to enforce any contract other than the one created by you writing a functionally correct check and signing it legally.
                          Due to a recent promotion, I should now be referred to as Major Obvious.

                          I would not be trying to provide information and knowledge if I did not sympathize.

                          Some days it is just not worth chewing through the restraints to face life.

                          Comment

                          Previously entered content was automatically saved. Restore or Discard.
                          Auto-Saved
                          Wink ;) Mad :mad: Big Grin :D Frown :( Embarrassment :o Confused :confused: Smile :) Stick Out Tongue :p Roll Eyes (Sarcastic) :rolleyes: Cool :cool: EEK! :eek:
                          x
                          Insert: Thumbnail Small Medium Large Fullsize Remove  
                          x

                          the color of snow is... (write the answer twice with an "@" between the words)

                          widgetinstance 213 (Related Topics) skipped due to lack of content & hide_module_if_empty option.
                          Working...
                          X