Banker must dishonor customer’s cheque in the following cases.
1. When the drawer countermands payment.
2. When the customer has died and the bank has notice of his death.
3. When the customer has become insolvent or an order of adjudication has been passed against him.
4. When the bank has received an order from a court prohibiting payment out of the funds belonging to the customer.
5. When a customer becomes a lunatic and the banker has got notice of his insanity.
6. Where the drawer informs the bank that the cheque is lost.
7. Where there are material alterations or the signatures of the drawer or endorsees are irregular.
8. When the banker suspects that the title of the person presenting the cheque is defective.
9. When the customer informs the banker that he has assigned the balance to his credit in his account.
10. When the banker has knowledge that the customer intends to use the funds in breach of trust.