CHEQUES

Meaning and Definition of Cheques

The banker opens a current and savings account for a customer. At that time, the customer is provided with a cheque book for operating his account. A cheque book contains 10 or 20 printed blank cheque leaves serially numbered. Customers are required to make use of these printed forms for drawing cheques. This practice helps the cheque to become safer. It also provides uniformity to cheques. Cheques are used to withdraw money from current and savings bank account. A cheque is a negotiable instrument. A negotiable instrument is transferable either by mere delivery or by endorsement and delivery. It gives a good and absolute title to the transferee who takes it good faith and for value and with out notice to the fact that any defect is existed in the title of the transferor Originally Section 6 of the Negotiable Instrument Act 1881 defined a cheque as “a bill of exchange drawn on a specified banker and not expressed to be payable otherwise on demand”.
This section has been amended in September 2002 to include truncated cheques and electronic cheques within the definition of cheques. As per the amended section 6, “A cheques is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheques and a cheques in the electronic form”.

Therefore a cheque is a bill of exchange with two additional qualifications namely:

1.A cheque is always drawn on a specified banker.
2.It is always payable on demand.

Apart from this a cheque involves Electronic cheque a Truncated Cheque