Kind of Cheques
1. Bearer Cheque
The bearer cheque is a type of cheque in which the bearer is authorised to get the cheque
encashed. This means the person who carries the cheque to the bank has the authority to ask the
bank for encashment.
This type of cheque can be used for cash withdrawal. This kind of cheque is endorsable. No kind
of identification is required for the bearer of the cheque.
For example: A cheque has been signed by Arjun (drawer) and the payee for the cheque is
Varun. Varun can either go himself to the bank or can send a third person to get encashment for
the cheque. No identification shall be required for the bearer’s name.
If a person does not want their cheque to be endorsable, they can strike off the “OR BEARER”
option mentioned in the cheque.
2. Order Cheque
This type of cheque cannot be endorsed, i.e., only the payee, whose name has been mentioned in
the cheque, is liable to get cash for that amount. The drawer needs to strike the “OR BEARER”
mark as mentioned on the cheque so that the cheque can only be encashed to the payee.
For Example: If a cheque has been signed with the name of Varun, then only the payee can visit
the bank to get an encashment for the same for a order cheque.
The payee’s identity may be cross-checked by the bank before encashing the sum of money.
3. Crossed Cheque
In this type of cheque, no cash withdrawal can be done. The amount can only be transferred from
the drawer’s account to the payee’s account. Any third party can visit the bank to submit the
cheque.
In case of a crossed cheque, the drawer must draw two lines at the left top corner of the cheque.
123. Cheque crossed generally.—Where a cheque bears across its face an addition of the words
“and company” or any abbreviation thereof, between two parallel transverse lines, or of two
parallel transverse lines simply, either with or without the words “not negotiable”, that addition
shall be deemed a crossing, and the cheque shall be deemed to be crossed generally.
124. Cheque crossed specially.—Where a cheque bears across its face an addition of the name
of a banker, either with or without the words “not negotiable”, that addition shall be deemed a
crossing and the cheque shall be deemed to be crossed specially, and to be crossed to that banker.
125. Crossing after issue.—Where a cheque is uncrossed, the holder may cross it generally or
specially. Where a cheque is crossed generally, the holder may cross it specially. Where a cheque
is crossed generally, or specially, the holder may add the words “not negotiable”. 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.
4. Account Payee Cheque
This is the same as the account payee cheque but no third party involvement is required. The
amount shall be transferred directly to the payee’s account number.
To ensure that it is an account payee cheque, two lines are made on the left top corner of the
cheque, labelling it for “A/C PAYEE”.
5. Stale Cheque
In India, any cheque is valid only until 3 months from the date of issue. So if a payee moves to
the bank to get withdrawal for a cheque which was signed 3 months ago, the cheque shall be
declared a stale cheque.
For example: If a cheque is dated January 1, 2020 and the payee visits the bank for withdrawal
on May 1, 2020, his/her request shall be denied and the cheque is declared stale.
6. Post Dated Cheque
If a drawer wants the payee to apply for withdrawal or transfer of money after the present date,
then he/she can fill a postdated cheque.
For example: If the date on which the drawer is filling the cheque is May 10, 2020, but he wants
the payment to be done later, he/she can fill the cheque dates as May 30, 2020. It shall be called
a post-dated cheque.
7. Ante Dated Cheque
If the drawer mentions a date prior to the current date on the cheque, it is called ante dated
cheque.
For example: If the current date is January 30, 2020, and the drawer dates the cheque as January
1, 2020. It shall be considered as an ante-dated cheque.
8. Self Cheque
If the drawer wishes cash for himself he can issue a cheque where in place of the Payee’s name
he can write “SELF” and get encashment from the branch where he owns an account.
For example: If a person wants Rs.1,00,000/- in cash, he can issue a self cheque and visit his
bank branch where he owns an account and get encashment in place of a cheque.
9. Mutilated Cheque
If a cheque reaches the bank in a torn condition, it is called a mutilated cheque. If the cheque is
torn into two or more pieces and the relevant information is torn, the bank shall reject the cheque
and declare it invalid, until the drawer confirms its validation.
If the cheque is torn from the corners and all the important data on the cheque is intact, then the
bank may process the cheque further.
10. Blank Cheque
When a cheque only has a drawer’s signature and all the other fields are left empty, then such a
type of a cheque is called a blank cheque.
An uncrossed cheque or an open cheque is a cheque that has not been crossed with two parallel
lines on the top left corner. Such cheques can be encashed at any bank. You can collect the
money for the cheque from the bank counter. It can also be transferred to the bank account of the
person who presented the cheque.
Types of uncrossed/open cheques are:
Bearer cheques
Order cheques
