Honouring a cheque issued by dead with spelling mistake

Upon the death of a customer,the title to his bank balance passes to his legal heirs .If however,the banker is unaware of the death of his customer,he may honour the cheque drawan by his customer and debit his account,not withstanding that payment has actually been made after the death of his customer.

IF THE RELATIVES INFORM THE BANK ABOUT THE DEATH,IT SHOULD BE TREATED AS A NOTICE TO THE BANK,SUBJECT TO THE SUBMISSION OF DEATH CERTIFICATE BY RELATIVES / LEGAL HEIRS.

Spelling mistake may not be treated as material alteration and may be ignored by the banker if the cheque is otherwise in order.

1) If the bank has knowledge from a reliable source, on the day the chq is presented for debit, of the death of the a/c holder, it will not pass the chq, regardless of when the chq was issued, and regardless of when the death has occured. "Reliable source" is a broad term. Bankers are expected to apply their mind and common sense in taking such decisions. In the absence of such knowledge about the death, the bank must pass the chq if the chq/payment is in order. If the relatives of the a/c holder have reported the death to the bank, and the bank on inquiry is convinced that the relatives are genuinely the relatives of the a/c holder and death has actually occured, it should not pass the chq, and should stop operations in the a/c. Relatives cannot advise stop payment of the chq.

2) The paying bank is not concerned with a spelling mistake in the payee name. This is the job of the presenting bank. Minor spelling mistakes in the amount in words are okay (thousnd instead of thousand) - bank should pass such chqs.