Meaning of cheque

A cheque is a negotiable instrument governed by the provisions in the Negotiable Instrument Act. It is an unconditional order, drawn on a specified banker, signed by the drawer, directing the banker, to pay on demand, a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.

Under Section 6 of the Negotiable Instruments Act, 1881, a cheque is defined as a “bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.” To understand this definition, it is necessary to know the definition of a bill of exchange.

According to Section 5 of the Indian Negotiable Instruments Act, 1881: “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.”