Kinds of Cheques?

Cheque supplied to the account holders can be used variously by them depending on the circumstances. In fact, based on the use and utility, cheques assume differing, characteristics and serve various purposes of the account holders.

(01). Bearer Cheque,

(02). Order Cheque,

(03). Crossed Cheque and

(04). Non Negotiable Cheques.

(01). Bearer Cheque:

Cheques in which the word 'Bearer' appears after the payee's name are called Bearer Cheque.

These kinds of cheque are likely cash since the are freely transferable from one person to another without any bar and it can be encashed by anybody from the bank over the counter.

(02). Order Cheque:

A cheque in which the word 'Order' appears after the name of the payee is called Order Cheque. An order cheque can be paid to the payee or to any person according to payee's order. Instructions are written on the back of the cheque.

(03). Crossed Cheque:

When two parallel lines are drawn across the face of a cheque, it is called crossed cheque. A crossed cheque can not be paid at the counter. It can be paid only through an account.

(04). Not Negotiable Cheque:

These cheque is a further check on fraud and forgery. These cheque are transferable from one hand to another. But the drawer gives a message by adding the words 'Not Negotiable' to the cheque. About such cheques the N.I Act. says that "a person taking a cheque crossed generally or specially bearing in either case the words 'Not Negotiable' shall not be capable of giving, a better title to the cheque than that which the person from whom he took it had". This provision restricts the 'negotiability' of the cheque. However, restriction on negotiability does not restrict 'transferability'. It implies that a cheque bearing 'not negotiable' crossing can not be encashed by the persons who got it from a thief or any finder even if he got it on consideration and without the knowledge of theft or less. Generally this kind of cheque is used by Government, Government Agencies or corporations etc. who want to restrict further negotiation of the cheques.