A Partnership account is maintained at a Bank's Branch. A crossed cheque is presented by one of the partners to partnership account, which is drawn on his individual name. Can the Bank accept the cheque for collection in Partnership firm's name?
Balaji (Law Officer) 10 December 2010
A Partnership account is maintained at a Bank's Branch. A crossed cheque is presented by one of the partners to partnership account, which is drawn on his individual name. Can the Bank accept the cheque for collection in Partnership firm's name?
SUNIL KUMAR (MAN) 27 December 2010
No. The collection of the cheque in Partner's individual name in the firm's account is against the intent of the drawer of the cheque who had crossed the cheque as Account Payee unless it is endorsed by the payee in favour of the firm.
In this context, to my knowledge RBI has prohibited such endorsement also.
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