Cheques may be defined as a written order of a depositor upon a bank to pay to or to the order of a designated party or to bearer, a specified sum of money on demand. The person who draws the cheques is called drawer, the bank on which the cheques is drawn in called drawee and the person to whom payment is to be made is called payee. It is an order of the customer without condition. It is drawn upon a certain bank in writing. The banker has always to pay it on demand. It is payable to a certain person or to his nominee or to the bearer of the instrument. There are different types of cheques.
Open cheques are those cheques which are paid across the counter of the bank. Open cheques may be bearer or order cheques. In bearer cheques a drawer orders the bank to pay a stated sum of money to the bearer, it is called bearer cheques. Any person who lawfully possesses bearer cheques is entitled to receive payment of that cheque. An order cheque is a cheque is to order a person in whose favor the cheques is drawn, it is called order cheques. The order cheque is paid by the bank only when the bank is satisfied about the identity of the payee.
Open cheques are those cheques which are paid across the counter of the bank. Open cheques may be bearer or order cheques. In bearer cheques a drawer orders the bank to pay a stated sum of money to the bearer, it is called bearer cheques. Any person who lawfully possesses bearer cheques is entitled to receive payment of that cheque. An order cheque is a cheque is to order a person in whose favor the cheques is drawn, it is called order cheques. The order cheque is paid by the bank only when the bank is satisfied about the identity of the payee.