The cheque is an unconditional order to the bank to pay certain amount to certain person ordered (specified) or to self or to the bearer of the document on demand. According to the Indian Negotiable Instrument Act, 1981 (Section 6) A, ‘Cheque is a bill of exchange drawn on a specified bank and not expressed to be payable otherwise on demand.
Essential Characteristics of a Cheque:
1. It is always a written order, never an oral one.
2. It is written by the customer only to his bank.
3. It is unconditional, i.e. there is no condition in cheque.
4. A fixed amount written on the cheque is paid by the bank.
5. The man whose name is written or is ordered by the customer is entitled to get the payment. Sometimes the bearer of the cheque also gets the payment of a cheque.
6. The payment of cheque is made only on demand. There is no fixed date for payment.
7. Customer’s signature on the cheque is necessary and it must tally with his specimen signature in the bank record.
8. The cheque must bear the account number and date.
9. The cheque printed on the prescribed form only should be used. These are the essential features of a cheque.
