Any person liable to pay, and called upon by the holder thereof to pay, the amount due on a promissory note, bill of exchange or cheque is before payment entitled to have it shown, and is on payment entitled to have it delivered up, to him, or, if the instrument is lost or cannot be produced, to be indemnified against any further claim thereon against him.
Where the cheque is an electronic image of a truncated cheque, even after the payment the banker who received the payment shall be entitled to retain the truncated cheque.
A certificate issued on the foot of the printout of the electronic image of a truncated cheque by the banker who paid the instrument, shall be prima facie proof of such payment.
Legal Commentary & Landmark Judgments: Section 81
Section 81 establishes the debtor's right to demand the physical delivery of the instrument upon payment, or a full indemnity in case the instrument is lost or destroyed.
Never pay a promissory note or bill upon a mere photocopy or promise of return. Under Section 81, insist upon the physical surrender of the original stamped note with 'PAID AND CANCELLED' written across it, or demand a registered indemnity bond.