We are taking a term loan from Bank.
Towards discharge of the Borrower’s outstanding debt obligations under
the Facility (“Outstanding Debt Obligations”), the Borrower is advised by Bank to give a signed cheque(s) drawn in favor of Lendor Bank, to discharge Borrower’s pecuniary
obligations and also authorize and empower Bank/its officers to present the cheque(s) in terms of Section 20 of the Negotiable Instruments Act 1881 towards repayment of our Outstanding Debt Obligations.
What sanctity of 1881 act? Suppose cheque pattern undergoes changes during tenor of bank, then automatically, they can not encash it.
What legal binding lies with handing over the blank cheque? Signing persons may die or leave organisation during tenor of loan
