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When we open Savings Bank account with “Cheque Facility” with a bank the Bank supplies us with a Cheque book, containing 10 or 25 Cheque Leaves.
The Banks’ cheues are printed with the name of the Bank and the Branch. Our Account Number is written or printed on all the leaves of the cheque book.
A cheque is nothing but a written request or order to the Branch of the Bank with which we open the account. The format of a cheque is “ Pay XYZ or Bearer Rupees Twelve Thousand Three Hundred and Forty Five only -Rs12345/-“ The Cheque will have to space on the right hand top a space or a line for putting the date of the cheque.
On the right hand bottom side of the cheque space will be there for putting our Signature.Cheques are said to be “Crossed” if we put two transverse parallel lines on the left hand top corner of the cheque, with or without the words “Account Payee Only”
In the above example the name of the person to whom we order the bank to pay, “XYZ” is called “Payee” of the cheque. The Account holder or the person issuing the cheque is called the “Drawer” of the cheque.
We must know and remember that a cheque can be filled in by anybody. That means, the following can be filled by anybody including us, the account-holder:
2.Amount in Words
3.Amount in Figures
4. Name of the Payee
5.Crossing of the cheque
But only the Account-Holder or the drawer of the cheque must put the “Signature”, the same one already put in the Account Opening Form and the Specimen Signature Card. Nobodyelse must put the signature, no matter how close the relation of the person with the account holder. If anybody puts the signature of others even similar or identical to the other person’s signature, it is called “ Forgery”, which is a Criminal Offence punishable under Law.
Also, if any of the above five items are altered, it is called “Material Alteration”. Can anybody do the material alteration? Yes. Anybody can make them. But any material alteration must be authenticated by the full signature of the drawer of the cheque, that is the person issuing the cheque/ the account holder. If any alteration be there on a cheque without the full signature of the drawer/ account holder, the bank will not and must not pay the cheque.
If we put the signature on a cheque in the space for the drawer of the cheque, without filling other items, such as date amount in figures, amount in words,and the name of the payee, the cheque is called a “Blank Cheque”. Anybodyelse can fill in the other above items , without any material alteration, the cheque is valid. A cheque is valid for six months from the “Date” of the cheque. A cheque without the signature of the drawer is a blank cheque form and even if other items are filled by anybody or even the account holder the cheque is not valid.
Hence, when we issue a cheque we must fill in the above explained items of date, the name of the payee, the amount in figures, the amount in words without any mistake.
The amount in figures must agree with the amount in words. Otherwise the bank will return the cheque with a remark ”the amount in figures and words differ”.
If we want to draw cash from our account we can fill in the Payee’s name as “SELF”.
Normally cheque books are printed as Pay _ or Bearer only. If we cut the word “Bearer” the cheque will be payable to “Order”. We can cut the word “Bearer” and write “Order”.
In that case the bank will have to check up the identity of the “Payee” and then only pay the amount of the cheque.
If we issue a cheque to some firms or towards Telephone bills or other bills we can and must cross the cheque as “Account Payee” only. If a cheque is simply crossed the bank will pay the amount through a bank account and if the crossing is “Account Payee” crossing only to the account of the payee in identical name.
We must keep our cheque book with care, as anybody can misuse the same. We must not keep the cheque leaves with our signature put on them. As far as possible we must sign only after filling up all material items. The risk of keeping blank signed cheques is unspecified and we must take proper care of our cheque leaves similar to cash or even more.
Whenever we issue or use a cheque we must write the details of the cheque in the counterfoil of the cheques or in the space provided in the extra leaves for the purpose in the cheque book.
While filling in the amount in figures, we must write in such a way that there is no extra space before the first numeral and put a /- slash and dash after the last numeral.
And in writing the amount in words no space must be left before the first letter and a line must be put after the last letter of the word. We must not give room for fraudulent alterations of the amount in figures and words.