Question

As per Negotiable Instruments Act, 1881 all of the following are types of the cheque except _____________.

• A. Bearer Cheques
• B. Order Cheques
• C. Crossed Cheques
• D. Blank Cheques

Answer 1

Answer: (D)

Blank Cheques

Under Section 6 of the Negotiable Instruments Act, 1881 cheque is defined as a bill of exchange drawn on a specified banker and not expressed to be

payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. The act also prescribes different types of cheques :

• Bearer cheque: A bearer cheque is made payable to the bearer i.e. it is payable to the person who presents it to the bank for encashment. However, such cheques are risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank. Bearer cheque can be transferred by mere delivery; they need no endorsement.
• Order cheque: An order cheque is one which is payable to a particular person. The payee can transfer an order cheque to someone else by signing his or her name on the back of it.
• Crossed cheque: Crossing of cheque means drawing two parallel lines on the left corner of the cheque with or without additional words like “Account Payee Only” or “Not Negotiable”. A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee’s account.