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A
TEAM
SIKORSKY
PRODUCTION
CHEQUES
GROUP MEMBERS NAME & ID :
Essentials: Instrument in writing
Contains unconditional order
Drawn by the Drawer
Drawn upon a specified banker
To pay a certain sum of money
Payable on demand
It is signed by the maker
Cheques
Order cheque Bearer
cheque
Blank cheque
Stale cheque
MultilatedCheque
Post dated cheque
Cheque
open cheque
Crossed cheque
Gift cheque
Traveller‟scheque
Parties of cheque:
Parties of cheque are –
Drawer
PayeeDrawee
Receipt need not be obtained
Convenient to receive money
Near money
Endorsable
No need of counting
An automatic record is maintained
Material alteration: addition to or deletion of text from a legal
instrument that significantly changes its legal sense or effect may thus invalidate it.
examples of material alteration1.The date2.the sum
3.The place4.The name
5.The crossing6.The rate of interest
Authorised
alteration
Non-material alteration
Examples of Authorised alteration:
1.Filling blanks, 2. blank endorsement
3.Acceptance conditional
4.General crossing
5.Consent of parties
Examples of Non-material alteration:
1.Correcting mistakes, 2.Intention of original parties,
3.Consent of parties
4.Result of an accident
Besides the above two types of crossing, in recent years, the following types of crossing have been developed
1. “Not Negotiable” crossing
2.Restrictive crossing or Account payee crossing
3.Double crossing
ENDORSEMENT:WRITING ON THE BACK OF THE INSTRUMENT FOR THE
PURPOSE OF NEGOTIATION.
Essentials of a valid
endorsement:On the back or face or on allonge
Made by maker/holder
Signed by endorser
Shouldn’t be partial
Completed by delivery
Made in ink
1.Blank or General Endorsement
2.Special or full
3.partial or invalid
4.Restrictive
5.Conditional or qualified
Pay „X‟ or order
Pay to the order of „X‟
Sans recourse
facultative
Sans Frais
Transfer of property
Right to sue the acceptor
Right to recover from endorsee
Right of further negotiation
LEGAL EFFECTS OF AN
ENDORSEMENT :
DIFFERENCE BETWEEN BILL OF EXCHANGE AND
CHEQUE
CHEQUE BILL OF EXCHANGE
Drawee : drawn on banker
Payable on demand : always
on demand
Days of grace: three days
Acceptance : no acceptance
required
Notice of dishonor: not
necessary
Any person/banker
Demand and expiry
No grace days
Need acceptance
Necessary
DIFFERENCE BETWEEN BILL OF EXCHANGE &
CHEQUE
CHEQUE BILL OF EXCHANGE
Crossing : crossed
generally or specially
Stamping : doesn’t require
stamping
Discounting : cant be
discounted
Can not be crossed.
Must be stamped
Can be discounted
Holder:Any person who have the possession of the instrument
and also the right to recover money in his own name.
Holder In Due Course: “Bonafide holder for value without notice”. And also
becomes a possessor for consideration.
Consideration for becoming a holder
in due course : Valuable consideration on value
Legal method
Holder before the date of maturity
Holder in good faith
Privileges of a holder in due course:
Title free from equities
Cured of all defects
Liability of prior parties
Rights in case of fictitious bills
Estoppel against
Denying original
validity
Denying the
capacity
Endorser to deny
capacity of prior
parties
Difference between holder and
holder in due course
Holder in due course Holder
Entitlement: acquires his possession
Consideration : consideration is a must
Maturity : before maturity
Title : free from defects
Entitled in his own name
Not necessary
After maturity
Doesn’t acquire good title
Difference between holder and
holder in due course
Holder in due course Holder
Presumption: bound to
be a holder
Recovering: liabilities of
prior parties
Privileges: Free from all
equities
Cant be a holder in due
course
Can recover the amount
No special privileges
THANK YOU ALL