Cheque is an instrument in writing containing an unconditional
order, addressed to a banker, sign by the person who has deposited money with
the banker, requiring him to pay on demand a certain sum of money only to or to
the order of certain person or to the bearer of instrument.
Whats
Are The Characteristics Of Cheque?
1. Cheque is an
instrument in writing
A cheque must be in
writing. It can be written in ink pen, ball point pen, typed or even printed.
Oral orders are not considered as cheques.
Every cheque contains an
unconditional order issued by the customer to his bank. It does not contains a
request for payment. A cheque containing conditional orders is dishonoured by
the bank.
A cheque is always drawn
on a specific bank mentioned therein. Cheque drawn by stranger are of no
meaning. Cheque book facility is made available only to account holder who are
supposed to maintain certain minimum balance in the account.
4. Cheque must be signed by customer
A cheque must be signed
by customer (Account holder) . Unsigned cheques or signed by persons other than
customers are not regarded as cheque.
A cheque when presented
for payment must be paid on demand. If cheque is made payable after the expiry
of certain period of time then it will not be a cheque.
Cheque must be for money
only. The amount to be paid by the banker must be certain. It must be written
in words and figures.
The payee of the cheque
should be certain whom the payment of a cheque is to be made i.e. either real
person or artificial person like joint stock company. The name of the payee
must be written on the cheque or it can be made payable to bearer.
A cheque must be duly
dated by the customer of bank. The cheque must indicate clearly the date, month
and the year. A cheque is valid for a period of six months from the date of
issue.
- Drawer : A drawer is
a person, who draws a cheque.
- Drawee : A drawee is
a bank on whom a cheque is drawn.
- Payee : A payee is a
person in whose favour a cheque is drawn.