NEGOTIABLE INSTRUMENTS ACT, 1881………..cont’d. CHEQUE: A cheque is a bill of exchange drawn upon a specified banker and payable on demand (Sec.6). A cheque is a species of a bill of exchange: but it has the following two additional qualifications, viz., 1. It is always drawn on a specified banker and 2. It is always payable on demand. All cheques are bills of exchange but all bills of exchange are not cheques. A cheque must have all the essential requisites of a bill of exchange. It must be signed by the drawer. It must contain an unconditional order on a specified banker to pay a certain sum of money to or to the order of a specified person or the bearer of the cheque. But it does not require acceptance as it is intended for immediate payment. DISTINCTION BETWEEN A BILL OF EXCHANGE AND A CHEQUE: 1. A bill of exchange may be drawn on any person, including a banker, but a cheque is always drawn on a banker. Thus all bills are not cheques where as all cheques are necessarily bills. 2. A bill must be accepted before the drawee can be called upon to make payment. A cheque requires no acceptance. 3. A bill which is not expressed to be payable on demand is entitled to three days grace. A cheque is not entitled to any days of grace. 4. A bill may be payable on demand or after the expiry of a certain period after date or sight. A cheque is always payable on demand. 5. A bill must be duly presented for payment to the acceptor or else the drawer of the bill will be discharged from liability. The drawer of a cheque is not necessarily discharged from his liability by delay of the holder in presenting it for payment. He is discharged only to the extent of the damage, if any, suffered by him. 6. A cheque may be crossed, but not a bill. 7. A cheque does not require any stamp whereas a bill, except in certain cases must be stamped. 8. The payment of a cheque may be countermanded by the drawer but the payment of a bill cannot be countermanded. 9. A cheque is not required to be noted or protested for dishonour. A bill may be noted or protested for dishonour before notary public. ---------
Posted on: Sat, 06 Dec 2014 01:31:40 +0000
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