MEANING AND FEATURES OF CHEQUE AND DIFFERENCE BETWEEN BILL OF EXCHANGE AND CHEQUE

Ø  MEANING AND FEATURES  OF CHEQUE AND DIFFERENCE BETWEEN BILL OF EXCHANGE AND CHEQUE
BUSINESS LAW

Ø  SHASHI AGGARWAL ECONOMICS AND LAW CLASSES

• MEANING
• SECTION 6 OF THE NEGOTIABLE INSTRUMENT ACT:-

1. A CHEQUE OR A BILL OF EXCHANGE DRAWN ON A SPECIFIED BANKER
2. AND NOT EXPRESSED TO BE PAYABLE OTHERWISE THAN ON DEMAND
3. AND IT INCLUDES THE ELECTRONIC IMAGE OF TURNCATED CHEQUE AND A CHEQUE IN THE ELECTRONIC IMAGE

·         FORMAT OF CHEQUE:-

• MEANING

·         FORMAT OF CHEQUE

• FEATURES OF CHEQUE

1. CHEQUE IS AN INSTRUMENT IN WRITING:  INK PEN/BALL POINT PEN/PRINTED/TYPED
2. IT IS ALWAYS DRAWN ON SPECIFIED BANKER
3. AND IT IS PAYABLE ON DEMAND WITHOUT ANY DAYS OF GRACE
4. DRAWN IN ACCORDANCE WITH THE REQUIREMENT LAID DOWN IN SECTION 5 OF THE ACT
5. MUST BE SIGNED BY THE MAKER
6. UNCONDITIONAL ORDER FOR PAYMENT OF CERTAIN SUM OF MONEY TO OR TO THE ORDER OF A SPECIFIED PERSON OR TO THE BEARER
7. MUST BE ADDRESSED BY ONE PERSON TO ANOTHER. BANK DRAFT IS NOT CHEQUE
8. DOES NOT REQUIRE ACCEPTANCE
9. CHEQUE MUST BE MENTION EXACT AMOUNT TO BE PAID
10. PAYEE MUST BE CERTAIN TO WHOM THE PAYMENT IS MADE
11. CHEQUE MUST BE DULY DATED BY THE CUSTOMER OF BANK: INDICATE THE DAY,MONTH AND YEAR. A CHEQE IS VALID FOR A PERIOD OF THREE MONTHS FROM THE DATE OF ISSUE

• PARTIES OF CHEQUE

1. DRAWER:- A DRAWER IS A PERSON WHO DRAWS THE CHEQUE]
2. DRAWEE:- IS BANK ON WHOM A CHEQUE IS DRAWN
3. PAYEE : IN WHOSE FAVOR THE CHEQUE IS DRAWN

• TYPES OF CHEQUE

1. BEARER CHEQUE”: WHICH ARE PAID OVER THE COUNTER. MORE RISKY IF THEY GOES TO WRONG PERSON . IT IS PAYABLE TO THE PERSON SPECIFIED THEREIN OR ANY OTHER WHO PRESENTS IT TO THE BANK FOR PAYMENT
2. ORDER CHEQUE:- BEARER IS CANCELLED   WHEN OR ORDER IS WRITTEN ON THE FACE OF THE CHEQUE. SUCH A CHEQUE IS PAYABLE TO THE PERSON SPECIFIED THEREIN AS THE PAYEE OR ANY ONE ELSE TO WHOM IT IS ENDORSED
3. CROSSED CHEQUE:- CROSSED 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 IS CREDITED TO PAYEE’S ACCOUNT
4. TYPES OF CHEQUE
5. ANTEDATED CHEQUE: BEARS A DATE EARLIER THAN THE DATE ON WHICH IT IS PRESENTED TO THE BANK
6. POST DATED CHEQUE:-BEARS SOME FUTURE DATE YET TO BE COME. CAN BE PRESENTED EARLIER THAN THAT DATE
7. STALE CHEQUE:-PRESENTED FOR PAYMENT AFTER THREE MONTH

• DIFFERENCE
• CHEQUE

1. ON A BANK OR BANKER
2. NO ACCEPTANCE
3. PAYMENT ON DEMAND
4. CAN BE CROSSED
5. NOTICE OF DISHONOR IS NOT NECESSARY
6. NO STAMPING
7. COUNTERMANDING/REVOKING THE PAYMENT
8. NO NOTING AND PROTESTING
9. STATUTORY PROTECTION

 BILL OF EXCHANGE

1. ANY PERSON INCLUDING A BANKER
2. MUST BE ACCEPTED
3. ON SIGHT OR USANCE
4. CAN NOT BE CROSSED
5. NOTICE OF DISHONOR IS NECESSARY
6. REQUIRED STAMPING
7. NO COUNTERMANDING

• CAN BE NOTED/PROTESTED IN CASE OF DISHONOR
• NO SUCH PROTECTION
• DIFFERENCE BETWEEN CHEQUE AND DRAFT
• DRAFT

1. CAN BE DRAWN ONLY BY A BANK ON ANOTHER BANK
2. DRAFT CAN NOT BE SO EASILY REVOKED BY COUNTERMAND OF PAYMENT

• CHEQUE

1. MUST BE ADDRESSED BY ONE PERSON TO ANOTHER
2. A CHEQUE MAY BE REVOKED BY COUNTERMAND OF PAYMENT