Professional Documents
Culture Documents
Cheques
Cheques
Module -3
Definition
• "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."
Bank
Signature of
Drawer
• Types of Crossing :-
1. General Crossing
2. Special or Restrictive Crossing
General Crossing
• There are two transverse parallel lines, marked across its face, or
– The cheque bears an abbreviation "& Co. "between the two parallel
lines, or
– The cheque bears the words "Not Negotiable" between the two parallel
lines, or
– The cheque bears the words "A/c. Payee" between the two parallel lines.
Special or Restrictive Crossing
• Crossing is that the bank makes payment only to the banker
whose name is written in the crossing. Specially crossed
cheques are more safe than a generally crossed cheques.
Material Alteration
• Any alteration made in the cheque is Material Alteration.
• These cheque are not honored by Banks, for making This as a
valid cheque then the drawer has to sign at every correction made.
• Alterations' Like:
– Date,
– Amount,
– Payee Name,
– Converting order into bearer cheque, etc.
Altered Cheque
Endorsement
• Signature included on the front or back of a check acknowledging
that both parties have agreed to exchange the specified amount on
the document.
• The signature or account information included on the back of a
check acknowledges that the intended recipient received the
document and deposited it.
• To cash a cheque, the issuer and the recipient must endorse the
document.
• Negotiation of an instrument is the process by which the
ownership is transferred from 1 person to another person.
Contd…
• There are 2 parties in Endorsement
– Endorser
– Endorsee
• Endorser
– The Person who signs the instrument with an instrument of
transferring his ownership.
• Endorsee
– The person in who’s favor the instrument is transferred.