When uncrossed cheque is presented for payment in cash at the counters of the bank, the presenter should sign on the reverse of the cheque. Banks verify the signature on the cheque with specimen signature of drawer on record before making payment. The payment cashier will ask for another signature to be made by the presenter at the time of payment. The banks ordinarily do not insist for presence of account holder for making cash withdrawals in case of bearer cheques unless the circumstances which warrants bankers to take precaution. In case of the bearer word in the cheque is cut then it becomes an order instrument .Banks make payment of order cheque only on confirming the endorsement/s of Payee and other endorsees on the reverse of the cheque. A depositor cannot withdraw a smaller sum than one Rupee except on the occasion of closure of the account.
Cash payment where Payee’s name written as self, our selves, Pay Cash etc.
It is a convention that companies and organizations while withdrawing cash from the bank write ‘ourselves’ in place of payee’s name. Sometimes even the cheque may be issued ‘Pay Cash’. Banks have been making cash payment of such cheques to the person who presented it at the counter without any hassle. However, nowadays it is learned that some bank branches refused the payment and insisted to write only “self” instead of “Ourselves”. The logic for such refusal is that an entity whether the firm, company or any other organization is a legal person (entity) opened the account and not a group of people. Moreover, cash payment can be made only to a single person and not to group of people against a single cheque, although more than one person signed on the cheque as authorized signatories of the organization. Many people question the validity of such refusal by the bank when a bearer cheque ‘payable to ourselves’ is presented for payment.
The above discussion rather seems like an argument based on English grammar and not on legal finding. Legally speaking banks are bound to pay to any person who presents a bearer cheque for payment at the bank counter, if the cheque presented is otherwise in order. Nowhere in negotiable instrument acts prohibits the payment of a cheque where payee’s name is mentioned as ‘Ourselves’. Furthermore, an order cheque payable to unidentifiable payee, banks are in order if it is paid to the account holder. Therefore the order cheques payable to God, Temple, Church, Masjid, etc. are considered as unidentifiable payee and in such cases banks are in order to make the payment to the account holder. Exactingly the words ‘Self’, ’Our Selves’ or ‘pay cash’ are not a noun, as persons of that name does not exit and therefore paid to the account holder.
When a cheque endorsed in blank by the drawer, even an order cheque becomes a bearer cheque. So the cheque bearing company’s seal with signatures of authorized persons on its back is treated as bearer cheque. Thus, the cash payment can be made to the bearer of the cheque irrespective of payee’s name.Usually, the persons coming to the bank for cash withdrawals on behalf an entity are known to the bank (regular employee, partner etc.). The presenter has to sign on the reverse of the cheque in the presence of cashier as an acknowledgement of having received the cash. The bank by convention may also insist the presenter to write his name, address and phone number whenever a new face presents the cheque for payment.
Cash payment of cheques issued in favour of firms/companies
As per law a bearer cheque is always a bearer cheque. However, when a cheque is drawn up in favour of a business entity, the cheque is purported to have the crossing effect. Banks cannot afford to make payment of such cheques without proper enquiry as that may later on deemed as negligence on the part of the banker. If proper identification is established banks may make payment of such cheques across the counter (normally bank contact their account holder and inform that the subject cheque is presented to them for cash payment and take their consent for the payment). Though it is not a rule prescribed by any law for payment of bearer cheque, as an abundant precaution cash payment of a cheque drawn up in favour of firms and companies is done only on obtention of endorsement (rubber stamp of the firm on the reverse of the cheque and signed by the authorised signatory of the beneficiary firm).
Cash withdrawal by illiterate/bedridden persons
If the depositor is unable to write, he/she must call on the Bank personally to withdraw money from her/his account. In case of aged or bedridden person, banks depute a person or an official at depositor’s cost, to obtain the signature/thumb impression duly witnessed.