Tuesday, August 25, 2020



A chaque (in America written as 'check') is a bill of exchange drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand.  A similar definition is provided on section 6 of the Indian negotiable instruments act of 1881 reads,

A cheque is a bill if exchange drawn upon a specified  banker and payable on demand.

Lastly, black’s law dictionary defines it as” A bill of exchange signed by the maker or drawer drawn on a bank, payable on demand, and unlimited in negotiability “

 Compare the definitions given to a bill of exchange and cheque and list down the basic differences between the two.

All the above 3 definitions of a cheque, unanimously recognize it as one type of Bill of exchange, hence the meaning given to a bill of exchange is similarly applicable to cheque. However, as indicated in the above definitions there are also peculiar characteristics which distinguish a bill of exchange from a cheque.  firstly the Drawee of a cheque is always a Bank. Any other person or organization is excluded from  accepting order and make payment on a cheque. This element is clearly provided in Art 829 of the commercial code which limits the drawee on a chequea only to a banker or an institution or establishment regarded by law, as a banker.

Secondly, the special feature attached to cheque is the time of payment. A cheque could only be paid on demand or at sight or presentment. The holder of the cheque has the right to immediately cash it with out the need for waiting any further time. The same idea is conveyed  in Art 854 of the commercial code which states that a cheque is payable at sight. The term “at sight” means on demand or the moment it is presentment  

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