Where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered, or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated, payment thereof by a person or banker liable to pay, and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such person or banker from all liability thereon;
and such payment shall not be questioned by reason of the instrument having been altered or the cheque crossed.
Where the cheque is an electronic image of a truncated cheque, any difference in apparent tenor of such electronic image and the truncated cheque shall be a material alteration and it shall be the duty of the bank or the clearing house, as the case may be, to ensure the exactness of the apparent tenor of electronic image of the truncated cheque while truncating and transmitting the image.
Any bank or a clearing house which receives a transmitted electronic image of a truncated cheque, shall verify from the party who transmitted the image to it, that the image so transmitted to it and received by it, is exactly the same.
Legal Commentary & Landmark Judgments: Section 89
Section 89 confers statutory protection upon paying bankers and debtors paying an altered instrument where the alteration is not apparent and the payment is made in due course.
When representing banks in cheque alteration disputes under CTS clearing, obtain high-resolution UV (Ultraviolet) and IR (Infra-Red) clearing images. If the bank can prove the alteration was invisible under standard clearing scanners, it is entitled to full discharge under Section 89.