KALYAN CITY LIFE

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Kalyan City is a fast emerging residential township in the Thane district of Maharashtra state, India. It is a central suburban town and resides 54 kms north-east of Mumbai. This blog regularly shares quality academic materials. Here we also document our unique experiences and vivid memories of life. Read our lucid informative articles to excel your understanding, knowledge and success.

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Articles published on Kalyan City Life blog are inspired from our work experience, field research, study of various good books and papers, seminars and consultations from subject scholars. Our unique collection of useful study notes is an outcome of a team effort and hard work of Gaurav Akrani, Prof. Mudit Katyani and Manoj Patil.

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What is a Cheque ? Definition - Kinds and Types of Cheques



square What is a Cheque ? Meaning ↓


Cheque is an important negotiable instrument which can be transferred by mere hand delivery. Cheque is used to make safe and convenient payment. It is less risky and the danger of loss is minimised.


Cheque and types of cheques

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square Definition of a Cheque ↓


"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."


square Different Kinds / Types of Cheques ↓


1. Bearer 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. However, such cheques are risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.


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. Uncrossed / Open Cheque


When a cheque is not crossed, it is known as an "Open Cheque" or an "Uncrossed Cheque". The payment of such a cheque can be obtained at the counter of the bank. An open cheque may be a bearer cheque or an order one.


4. 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.


5. Anti-Dated Cheque


If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is valid upto three months from the date of the cheque.


6. 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.


7. Stale Cheque


If a cheque is presented for payment after three months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.




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5 Comments :

  1. Anonymous said...

    Now cheque validity is 3 month from 6 month ,,

  2. Anonymous said...

    there is no neeed of a revenue stamp for receiving a cheque.

  3. Anonymous said...

    if we issue a cheque to a party,and suppose we give any additional information by mere writing anything on the back of the cheque, will it overrule the instructions of the cheque? obviously not, but i have a case .. need some inputs.

  4. Gaurav Akrani said...

    Actually, there is no provision in the banking and negotiable instrument act which prohibits the drawer of the cheque to write on the back of the cheque.

    So, there is no chance of any legal defaults.

  5. kugan rj said...

    I have not known to all these information before.It is really a useful information to anybody like me.
    now i got a clear idea on how use the cheques...
    Thanks a lot

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