Question

Taking in care of Negotiable Instruments Act, 1881, which of the following is the essential for a cheque?

• A. It should contain conditional order
• B. It must not signed by drawer
• C. Cheque is n not payable on demand
• D. It is payable to specified person

Answer 1

The correct option is D It is payable to specified person

A cheque is a bill of exchange drawn on a specified banker and is expressed to the payable, otherwise than on demand.” The essential requisites of cheque are as:

• Must be in Writing – The cheque may be written in hand by using ink or ballpoint pen, typed or even it may be printed. But the customer should not use pencil to fill up the cheque form. Even though other columns may be permitted to be written in hand or printed or typed, the signatures should be made by ink pen or ballpoint pen by the maker.
• Must be Unconditional – The order to pay the amount must be unconditional. If there is any condition imposed to pay the amount to the holder of the cheque then it will not be considered as a cheque. A cheque made payable on the happening of a contingent event is void ab-initio.
• Must be Drawn on a Specified Banker – For the validity of a Cheque it must be drawn on a specified banker. If there is not mentioned in the cheque about the banker it would not be a valid cheque. In addition to it, it must contain all the three parties i.e. Drawer, Drawee and Payee.
• Certain Sum of Money – It is one of the essential requirement of the Cheque that it must be payable in money and money only. If is not in term of money then it will be a valid one. The sum mentioned in it must be certain.
• Certain Payee – The parties of the Cheque must be certain. There are three parties of the cheque i.e. Drawer, Drawer and Payee. In a valid Cheque the name of the must contain in other words they must be certain. It must contain an order, which must be unconditional. If any condition were imposed then it would not be a valid cheque.
• Date – In a valid cheque it must be signed by the drawer with date otherwise it would not be a valid cheque. It must be written in hand by using ink or ball point pen, typed or even it may be printed as it becomes conclusive proof i.e. presumption under Section 118(b) unless contrary is proved.