Cheque and its essentials
Cheque
is a special type of Bill of Exchange. It is drawn on banker and is required to
be made payable on demand. A “cheque” is defines as “a bill of exchange drawn
on a specified banker and not expressed to be payable otherwise than on
demand.” [Section 6] ‘Cheque’ includes electronic image of a truncated cheque
and a cheque in electronic form. The definition is amended by Amendment Act,
2002, making provision for electronic submission and clearance of cheque. The
cheque is one form of Bill of Exchange. It is addressed to Banker. It cannot be
made payable after some days. It must be made payable ‘on demand’.
The essentials of a Cheque are :-
a) Essentials of
Bill of Exchange: As a
cheque is a bill of exchange, it must contain the essentials of a bill of
exchange. In addition there are few more essentials as below.
b) Drawn on a
specified banker: The
drawee in case of a cheque is always a specified banker.
c) Payable on
demand: The cheque is
always payable on demand.
d) No Stamp:
A Cheque does not require a stamp.
e) Acceptance:
No acceptance is necessary by the draw before the demand for payment.
f) Payable to bearer:
A cheque can be made payable to bearer.