Circumstances in which a banker can dishonour a cheque:

There are certain circumstances under which a banker may dishonour a cheque. These circumstances are primarily designed to protect the interests of the bank and its customers, as well as to ensure the credibility and integrity of the banking system. Here are some key reasons why a banker may dishonour a cheque:

1. Insufficient funds:
If the account holder does not have sufficient funds in their account to cover the amount mentioned on the cheque, the banker may dishonour it. This is one of the most common reasons for cheque dishonour.

2. Irregular signature:
If the signature on the cheque does not match the specimen signature provided by the account holder, the banker may refuse to honour the cheque. This is done to prevent fraud and ensure the authenticity of the document.

3. Stale cheque:
A cheque becomes stale after a certain period of time, typically six months from the date of issue. If a cheque is presented after it has become stale, the banker has the right to dishonour it.

4. Alterations or overwriting:
If there are any alterations or overwriting on the cheque, without proper authentication or explanation, the banker may dishonour it. This is to prevent any unauthorized changes to the cheque.

5. Post-dated cheque:
If a cheque is presented for payment before the date mentioned on it, the banker may dishonour it. The cheque is considered post-dated until the specified date arrives.

6. Drawer's instructions:
If the drawer of the cheque has given specific instructions to the bank regarding payment, such as "payable to bearer" or "not negotiable," and those instructions are not followed, the banker may dishonour the cheque.

7. Account closed:
If the account from which the cheque is drawn has been closed or is no longer active, the banker will dishonour the cheque. This is to prevent transactions from being made from an inactive or closed account.

8. Legal reasons:
If there are any legal restrictions or court orders that prevent the payment of the cheque, the banker may dishonour it. This could be due to a freeze on the account or any other legal proceedings.

9. Technical reasons:
There may be technical issues such as network failures, system errors, or communication problems that prevent the banker from honouring the cheque. In such cases, the cheque may be dishonoured temporarily until the issue is resolved.

In all these circumstances, the banker is legally justified in dishonouring the cheque. It is important for individuals and businesses to ensure that they meet the necessary requirements and maintain sufficient funds in their accounts to avoid cheque dishonour.