MMS BATCH 2020-22, DIV – B.

Name: Shardul Jadhav

ROLL NO – 108

LEGAL ASPECTS ASSIGNMENT

Difference between Cheque, Bills of Exchange and Promissory note.
No Cheque Bills of Exchange Promissory Note

1 Meaning of Cheque Meaning of bills of Meaning of

A cheque is an order exchange Promissory Note
to a bank to pay a A bill of exchange is a A promissory note is an
stated sum from written order drafted by unconditional promise in
drawer's the drawer on drawee to writing made by one
account, written on pay a specific sum person to another, signed
a specially printed within a by the maker, engaging
form. mentioned time to pay on demand or at a
period without any fixed or
condition. determinable future time,
a sum certain in money
to the order of a
specified person, or to
bearer.
2 Definition of Definition of bill of
cheque According to exchange
Section 6 of
According to Section 5 in
Negotiable
The Negotiable
Instrument Act
Instruments Act, 1881.
1881, A cheque is
a bill of exchange A “bill of exchange” is
drawn on a an instrument in writing
specified banker containing an
and unconditional order,
not expressed to be signed by the maker,
payable otherwise directing a certain person
than on demand. to pay a certain sum of
money only to, or to the
order of, a certain person
or to the
bearer of the instrument.
3 In cheque, there In bills of exchange,
are three parties there are three parties
namely – 1) involved namely -
Drawer,
1) Drawer,
2) Drawee and
2) Drawee and
3) Payee
3) Payee
4 It can be drawn A bill of exchange is
only by the drawn by the creditor
account holder of a
bank.
5 In a cheque, an In bills of exchange
order for payment is Order to pay is given to
given to the bank bank or an individual
6 A cheque is It may be payable on
payable always on demand or after a
demand. specified time
Definition of
promissory note
According to Section 4
of the Negotiable
Instrument Act, 1881.
A “Promissory Note” is
an instrument in writing
(not being a bank-note
or a
currency-note) containing
an unconditional
undertaking signed by the
maker, to pay a certain
sum of money only to, or
to the order of, a
certain person, or to
the bearer of the
instrument.
In Promissory Note,
there are two parties
namely – 1) maker and
2) Payee
A promissory note can
be made by any person.
In a promissory note,
there is a promise to pay.
It may be payable on
demand or after a
specified time
7 Grace time – Grace time- A bill of Grace time – Three days
Three days of exchange has three days of grace are given in
grace are not of grace period. promissory notes
given in a payable after a
Cheque specified time.

8 The drawer and The drawer and payee The maker and the
payee may be the may be the same person. payee/drawer may not be
same the same person.
person.

9 No stamps required A bill of exchange must In a promissory note,

to be affixed. be stamped to be stamps are required to be
affixed. Affixed.

1 Cheque can be Crossing of the bills Crossing of the

0 crossed. of exchange is not promissory note is not
required. required.

11 It is a negotiable It is also a negotiable It is also a negotiable

instrument and instrument and instrument and
unconditional order unconditional order unconditional order

12 Cannot be endorsed Can be endorsed Can be endorsed