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If the cheque has been issued by the drawer who is insolvent.If the account of the drawer is either closed or frozen.There are insufficient funds in the account of the drawer of the cheque.It is a cheque of such a nature which cannot be made payable even if it is complete in all respects.
A cheque may be marked by the bank is the drawer, holder or collecting banker want it. Such a cheque shows authenticity and credibility that the funds are sufficient in the bank account of a person.
Whoever presents the cheque to the bank, the amount is paid to him. In such a form of cheque, the words ‘or bearer’ are added with the name of the person. They are:Ī bearer cheque is one which is negotiated only when the delivery of possession happens. There are various forms or kinds of Cheque. The person in whose name the cheque is issued can go to the bank and collect money on depositing the cheque. The bank provides the cheques to a person and this cheque can be filled by the person holding the account and issue it as a token of payment. As per sec 138 of the act the validity of a cheque is for six months from the date of issue of the cheque.Ī cheque in the usual parlance is issued by a person who has a bank account with funds. The Negotiable Instruments Act, 1881 (hereinafter referred to as the Act) is an act which in Sec 6 defines a cheque as a bill of exchange which is drawn on a specified banker and it is expressly mentioned that it should not be paid unless a demand is made for its payment.Ī cheque also includes the electronic image of a truncated cheque or a cheque in the electronic form. What are the different kinds of Cheque? Their validity and Case Laws