A Cheque is a specially printed paper form issued by the banks to their customers to draw money or pay monies to third parties from their running account like SB/Current Account, Cash Credit Account etc. that contains following features.
[The meaning of ‘Bearer Cheque’: Bearer cheque means a person in possession of a cheque which is payable by the drawee bank to the bearer of the cheque.
The meaning of ‘Order cheque’: ‘Order cheque’ means the payment of that cheque will be made by the bank only to ‘Payee’ or to a person to whom payee has endorsed to collect the payment and not to the bearer. The endorsement (indorsement) shall be on the instrument itself.]
6. The following two lines start with the word RUPEES with blank space for writing the amount in words payable. We also find a box at the end of lines. This box is to fill in the amount payable in figures. The amount written in words is called ‘legal amount’ of the cheque and amount written in figures is called ‘courtesy amount’. Where there is a difference between words and figures expressed in a cheque, the amount in words is the amount payable as per Section 18 of N.I.Act 1881. It is customary to return a cheque written only in figures with a reason “Amount required in words”. However, if the amount is written only in words, though it is unusual in form, it is not incomplete and therefore bank is supposed to pay such cheque, failing which they may face the problem and would probably be liable to their customer for any damage or loss incurred through refusal.
7.Underneath the rows kept for writing amount in words and figures, we find vacant space which is reserved for the account holder to sign.
8. Underneath the space provided for drawer’s (Account holder) signature, we find code line. The code line in a cheque is the clear White Band portion at the bottom of the cheque which is exclusively meant for MICR (Magnetic Ink Code Recognition) code numbers to facilitate mechanised cheque processing. In the code line first group of 6 digits indicates the cheque number, the second group of 9 digits indicate the city code (first 3 digits aligned with PIN code used for postal address) next three digit represent the bank code, last 3 digits represent branch code in cheque processing centre and next group of 2 digits like 10, 11,12 and so on indicates the type of instrument like SB, Current account, CC account etc. The code line should not be disturbed to avoid rejection of cheque at the processing centre.
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