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Cheque (What is cheque (3 parties of cheque (ii) person direct to pay…
Cheque
What is cheque
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cheque must be in writing, signed by the drawer
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amount specified, always certain and must be clearly mentioned both in figures and words
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cheque must bear date, otherwise it may be invalid and shall not be honoured by the bank.
is a Bill of Exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
Types of cheque
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Crossed
cheque bears across its face two parallel transverse lines, the cheque is said to be crossed.
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collecting bank which has to ensure that the proceeds are credited to the account of payee only and no other
the payment cheque not made over the counter at bank but only credited to the bank account of the payee
collecting banker allows the proceeds of the cheque so crossed to be credited to any other account, he may be held guilty of negligence in the event of an action for wrongful conversion of funds being brought against him.
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