It 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."
Types of Cheque
1. Bearer Cheque or open Cheque
When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment.
2. Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word "or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque is payable to the person specified therein as the payee, or to any one else to whom it is endorsed (transferred).
3. Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque with or without additional words like "& CO." or "Account Payee" or "Not Negotiable". A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee's account.
4. Ante-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "ante-dated cheque". Such a cheque is valid upto 3 months from the date of the cheque.
5. Post-Dated Cheque
If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post dated cheque cannot be honoured earlier than the date on the cheque.
6. Stale Cheque
If a cheque is presented for payment after 3 months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.
7. A self cheque
A self cheque is written by the account holder as pay self to receive the money in the physical form from the branch where he holds his account.
8. ―A truncated cheque
means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing. The expression ―clearing house‖ means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.
Parties of a Cheque:
There are three parties to the cheque
1-Drawer or Maker
2-The bank - on whom the cheque is drawn (i.e. the bank with whom the account is maintained by the drawer)
3- Payee – Payee is the person whose name is mentioned on the cheque to whom or to whose order the money is directed to be paid.
Types of Cheque
1. Bearer Cheque or open Cheque
When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment.
2. Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word "or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque is payable to the person specified therein as the payee, or to any one else to whom it is endorsed (transferred).
3. Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque with or without additional words like "& CO." or "Account Payee" or "Not Negotiable". A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee's account.
4. Ante-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "ante-dated cheque". Such a cheque is valid upto 3 months from the date of the cheque.
5. Post-Dated Cheque
If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post dated cheque cannot be honoured earlier than the date on the cheque.
6. Stale Cheque
If a cheque is presented for payment after 3 months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.
7. A self cheque
A self cheque is written by the account holder as pay self to receive the money in the physical form from the branch where he holds his account.
8. ―A truncated cheque
means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing. The expression ―clearing house‖ means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.
Parties of a Cheque:
There are three parties to the cheque
1-Drawer or Maker
2-The bank - on whom the cheque is drawn (i.e. the bank with whom the account is maintained by the drawer)
3- Payee – Payee is the person whose name is mentioned on the cheque to whom or to whose order the money is directed to be paid.
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