XII Banking - Question 10 - Cheque

Q.10 (A). Define a Cheque?

Q.10 (B). Name the parties to a cheque.

Q.10 (C). What are the essentials of a cheque?

Q.10 (D). Draw a specimen of a cheque.




CHEQUE

Section B of the Act defines a cheque as, ‘’A bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.’’ A cheque is a bill of exchange but a bill of exchange often is not a cheque. A cheque is always payable on demand. The person drawing or making the cheque must be a customer of the bank and must be having the required find as deposit with the bank.


PARTIES TO A CHEQUE

The parties to a cheque are


Drawer He is the maker of the cheque. He must be the holder of the account at the bank and must sign the cheque as per specimen signature.


Drawee He is the banker with whom the A/C is maintained by the drawer of the cheque.


Payee He is a person named in the cheque to whom or to whose order the payment is to be made.


ESSENTIALS OF A CHEQUE

A cheque must have the following features / essentials.

i. It must be in writing but should not be written by a pencil.

ii. It must be an unconditional order to pay. The drawer must not pay any condition for the payment of cheque.

iii. It must be signed by the person giving it.

iv. Cheque must be drawn upon a banker not else.

v. It must be for the payment of a certain sum of money only.

vi. Amount of money must be written in figures and words.

vii. The cheque must be payable on demand.