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Parties involved:
Parties involved:
Drawer, Drawee, Acceptor, Payee (Endorser &
Endorsee)
Cheque:
Section 6 states as under:
Characteristics:
Parties involved:
The cheque in which the words “or bearer” are strike out
and order is given by the drawer to a specific person for
payment, is an order cheque.
The order cheque may be paid over the counter but the
drawee bank shall have the responsibility to verify the
identification of the named person.
Example:
Crossing or change of crossing after issue:
Stage-I:
Stage-II: Mr. Karim as holder may cross it as under.
i. When a cheque is crossed generally the holder may cross it
specially.
Example:
Stage-I:
Stage-II:
iii. Where a chque is crossed generally or specially the holder
may add the word “Not negotiable”.
Example:
Stage-I:
Stage-II:
iv. Where a cheque is crossed specially, the banker to whom it
is crossed, may again cross it specially to another Banker his
agent for collection.
Stage-I:
Stage-II:
v. When an uncrossed cheque or a cheque crossed generally is sent to a
banker for collection it may cross the same specially to itself.
Example:
Stage-I:
Stage-II:
Example:
Stage-I:
order
Stage-II:
Overleaf of the cheque
Karim
Here:
Mr. Karim is Endorser
Mr. Rahim is endorsee
Mercantile Bank Ltd. is the drawee bank.
Blank Endorsement – Full Endorsement
Example:
Blank Endorsement
Stage-I:
order
Stage-II:
Overleaf of the cheque
………………………………………………
Karim
Example:
Stage-I:
order
Stage-II:
Overleaf of the cheque
order
Karim Invalid
Example:
Stage-I:
order
Stage-II:
Overleaf of the cheque
Karim
Mr. Rahim has nominated Mr. Jashim as agent and restricted the
endorsement by mentioning “for the A/C of Mr. Karim”.
Conditional Endorsement:
Example:
Stage-I:
order
Stage-II:
Overleaf of the cheque
Karim
Example:
Stage-I:
order
Stage-II:
Overleaf of the cheque
Karim
Before going to the court payee shall have to fulfill the following
conditions.
a. The cheque should be presented within a period of six months
from the date of its issuance or within its validity.
b. The payee must serve notice of dishonour within 15 days of
dishonour.
c. Failure of the drawer in paying the amount of cheque within 15
days of the receipt of the notice by the payee.
Holder: