Cheque
Also called: Truncated cheque, Cheque in electronic form, Crossed cheque
A bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, including the electronic image of a truncated cheque and a cheque in electronic form. Section 6 of the NI Act.
Explained
Section 6 of the Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, and it includes the electronic image of a truncated cheque and a cheque in the electronic form. A cheque is therefore a species of bill of exchange under Section 5, so it must be in writing, contain an unconditional order, be signed by the drawer and direct payment of a certain sum of money to a certain person or to his order or to bearer.
Two further features distinguish it from other bills. The drawee is always a specified banker, and it is always payable on demand, so no acceptance is needed and there are no days of grace. Explanation I explains that a cheque in electronic form is drawn using a computer resource and signed in a secure system with a digital or electronic signature, and that a truncated cheque is one truncated during a clearing cycle by the clearing house or bank on generation of an electronic image, replacing physical movement of the paper. If the amount in figures differs from the amount in words, the amount in words prevails under Section 18.
Crossing is peculiar to cheques. Under Sections 123 and 126, a cheque crossed generally may be paid only to a banker, and one crossed specially only to the banker named. The words not negotiable do not stop transfer, but the transferee cannot get a better title than the transferor had.
Dishonour attracts criminal liability under Section 138 where a cheque drawn on the drawer's account for discharge of a legally enforceable debt is returned unpaid for insufficiency of funds or for exceeding the arrangement, subject to presentation within six months or the validity period, a written demand within thirty days of information of dishonour, and failure to pay within fifteen days of the notice. Section 139 presumes that the holder received the cheque for a debt or liability, and in Rangappa v. Sri Mohan the Court held that this includes the existence of a legally enforceable debt, rebuttable on a preponderance of probabilities. The offence is compoundable under Section 147.
What the law says
[A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.
Explanation I.—For the purposes of this section, the expressions—
Defines cheque, truncated cheque and cheque in electronic form
A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified even which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payble may be “certain”, within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
Defines bill of exchange, of which a cheque is a species
If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.
Words prevail over figures
Where a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker.
Payment of cheque crossed specially.—Where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed, or his agent for collection.
Payment of cheques crossed generally and specially
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years’], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a) thecheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
Offence of dishonour of cheque and its conditions
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability.
Presumption that the cheque was for a debt or liability
Example
For example, a cheque shows Rs 15,000 in figures and Rupees Fifty Thousand in words. Under Section 18 of the NI Act the amount ordered to be paid is Rs 50,000.
For the exam
- Cheque is a bill of exchange on a specified banker, payable only on demand (Section 6).
- It includes a truncated cheque's electronic image and a cheque in electronic form.
- Amount in words prevails over figures (Section 18).
- General crossing: pay only to a banker; special crossing: only to the named banker (Section 126).
- Section 139 presumption covers a legally enforceable debt and is rebuttable (Rangappa v. Sri Mohan).
508 questions in the Law Maker question bank use this term. Practise Negotiable Instruments Act, 1881 questions
Judgments
- Rangappa v. Sri Mohan (2010)The presumption under Section 139 of the Negotiable Instruments Act includes the existence of a legally enforceable debt or liability; it is rebuttable, and the accused need only raise a probable defence on a preponderance of probabilities.
- Sanjabij Tari v. Kishore S. Borcar (2025)The Court restored a cheque bounce conviction set aside in revision, held that breach of Section 269SS of the Income Tax Act does not displace the Section 139 presumption, and issued guidelines for Section 138 cases.
- C.C. Alavi Haji v. Palapetty Muhammed (2007)A Section 138 notice sent by registered post to the drawer's correct address is presumed served under Section 27 of the General Clauses Act; the complaint need not further allege that the drawer evaded service.
Related terms
- Bill of exchangeAn instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer (Section 5, NI Act).
- Negotiable instrumentA promissory note, bill of exchange or cheque payable either to order or to bearer (Section 13(1) of the Negotiable Instruments Act, 1881).
- Holder in due courseOne who for consideration becomes possessor of a bearer instrument, or payee or indorsee of an order instrument, before maturity and without cause to believe the transferor's title defective. Section 9, NI Act.
- Promissory noteA written instrument, not a bank-note or currency-note, containing an unconditional undertaking signed by the maker to pay a certain sum of money only to, or to the order of, a certain person or the bearer.
- Payment in due coursePayment according to the apparent tenor of a negotiable instrument, in good faith and without negligence, to the person in possession, where nothing gives reasonable ground to believe he is not entitled to it (Section 10, NI Act).
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.