What are the elements available in a Cheque or Check?

A Cheque also spelled Check in American English, is an instrument in the form of a piece of paper printed in a specified format following the guidelines of the Financial Institutions (Banks) that demands the Institutions to pay off a specified degree of amount in a specific Currency mentioned on it against an Account Number(Bank Account) printed on it. It is a type of Bill of Exchange and was developed as a way to make payments without the need to carry large amounts of Gold, Silver, or Cash.

Specimen Cheque

Cheque is a negotiable instrument which can be transferred to the third person based on the nature and kind of the cheque. It is used to make safe, convenient and accurate payment. It is less risky and dangerous than carrying Cash.

Cheques are being entertained since ancient times and at least since 9th century. Around the early 1990s the volume of issuing cheques was peaked up. Since then cheque payments are fallen down due to the partly replacement of cheque payments with Electronic Payment System.

What is a Cheque Drawer?

When a cheque is issued/written to encash or make payment there will be 3 kinds of Legal Entities or Persons will be in connection with the Cheque. Drawer is the first person (or an organization) who writes a cheque for the payment of some amount from his Bank Account. He restricted to write a cheque for his debts upto his Balance or Overdraft limit at his Bank.

What is a Cheque Drawee?

Drawee is the Second Party who authorizes you to write Cheque against the limited amount in your Account maintained at your Branch, Nothing but your Bank. Without the Financial Institutions there is no Cheque at all. This is the organic place for manufacturing Cheque Book.

What is a Cheque Payee?

Payee is the Third Party most important Legal Right Person of the cheque to get the money. He is the person who receives the cheque for encashment. In the case of Self Cheque the Drawer and Payee will be the same person. Here i would like to ask you a question that what will be the result, if i write a Crossed Self Cheque for my outstation Creditor or Supplier for payment.