Case-1 : Alteration of cheque and liability of the drawer.

Background :

Mr. Rafique Ahmed a business owner, issued an open bearer cheque of BDT 25,000 in favour of Mr. Kamal Hossain to settle a personal liability. The cheque was drawn on his account maintained with ABC Bank PLC and clearly contained the word 'Bearer' on it's face at the time of issuance.

After receiving the cheque, Mr. Kamal Hossain struck out the word 'Bearer' and added a general crossing on the cheque without the knowledge and consent of Mr. Rafique Ahmed. The cheque was then negotiated successively to Mr. Nasir, Mr. Jamal and finally to Mr. Farid, each of whom received the cheque in good faith and for value.

When Mr. Farid deposited the cheque into his account for collection, the cheque was returned unpaid by the paying bank with the remark "Payment stopped by drawer". Mr. Farid subsequently served a legal notice upon Mr. Rafique Ahmed demanding payment of the cheque amount.

In reply to the notice, Mr. Rafique Ahmed denied liability and raised the following defences :