Subject :- Banking Laws & Practices (BNK601)

1st Scenario:

M/s New Century cotton & CO receives a postdated cheques for the supply of cotton bales to Mr. Ali. The payee endorses the cheques in favor of the cotton merchant for a valuable consideration. The cheques gets dishonored when presented on the due date, and the endorsee, claiming as a holder in due course, sues the drawer Mr. Ali and the payee M/s New Century Cotton & CO. The drawer contends that he is not liable because he believes that his issued cheques would be presented for payment only after the delivery of cotton bales from the supplier, which the payee has not fulfilled.

1.What are the necessary conditions for a person to be called "Holder in Due Course", and which conditions satisfy the claim of the endorsee of being a holder in due course in the above scenario?

2.You are required to describe in detail whether the plea of the drawer would be acceptable in the court of law?

2nd Scenario:

Mr. Adnan has taken a loan of Rs: 50,000/= from Mr. Usman. On the due date of the loan, Mr. Adnan receives a cheques from Mr. Ayaz, who has mentioned in the face of the Cheques 'Pay to Mr. Adnan'. Mr. Adman, after putting his signature on the back of the cheques and delivered it to Mr. Usman.

1.What type of endorsement is made by Mr. Adnan? Describe different types of endorsements that Mr. Adnan can use to make the payment. 3-Marks

2.Describe different types of crossing available in banking, further show the changes in the cheques by drawing, if it is crossed by Mr. Ayaz and the bank respectively 3-Marks

(You are required to clearly label the picture to whom it belongs otherwise marks will be deducted)

Note:-Solve these question and please explain in detail in such a way that i will get 10/10 marks.