vikash singh 14 March 2018

Bearer cheque

I have recently joined bank as a clerk and I'm really confused about bearer cheque. My query is that if a drawer Mr. Ram issue a bearer cheque in favour of Mr. Vijay without crossing it and didn't endorses the cheque at or verify the signature of Mr.Vijay at back of the cheque. As a banker if anybody presents that cheque to me for making payment ,shall I make the payment? OR At first shall I ascertain that the presenter of the cheque is Mr Vijay and after that I'll make the payment? OR I can deny payment to the presenter of the cheque if I couldn't establish his identity I hope I'll get my query answered...

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R.Ramachandran (Advocate) 14 March 2018

Please state, whether you are alone in your bank or you have any seniors to you.

Have you raised your this doubt before your senior and if so, what did your senior instruct you?

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vikash singh 14 March 2018

I'm in remote village only one senior who is Branch Manager. I have asked him and others also but all have different views...Some one tells that NI ACT SEC 46 protect us in case of bearer cheque...someone tells that if u have any doubt don't make payment. I have gone through Sec 46 but can't understand a single word. Can anyone explain it in simple language

R.Ramachandran (Advocate) 14 March 2018

As per your example, If a drawer Mr. Ram issue a bearer cheque in favour of Mr. Vijay without crossing it, IT CANNOT BE CALLED A BEARER CHEQUE.

The cheques normally contain the words "PAY ___________________ or Bearer"

Therefore, unless after the words PAY nothing is filled up (i.e. completely left BLANK) and only the word Bearer appears, then and only then IT CAN BE CALLED A BEARER CHEQUE and not otherwise.

However, in your example, you say that it contains the words "PAY Mr. Vijay or Bearer"

Since the words "PAY Mr. Vijay" appears (though the words "or Bearer" has not been scored out), it is not a Bearer cheque and payable only to Mr. Vijay.

In this case, since the cheque has not been crossed, you cannot credit it to any account, but you have to make the payment to Mr. Vijay across the counter.

Therefore, it is important for you to identify whether the person who presents the cheque to you for taking payment is Mr. VIJAY or not.

This can be done by you, only after establishing the complete identity of the person that he is in fact Mr. Vijay, (he can be any one of the Vijays - not necessarily the one intended by the Drawer of the cheque) you can make the payment. For this you have to get the copy of the identify card /Pan Card/Aadhar Card/Driving Licence etc., where the Address particulars are also available. Mobile number can also be obtained. You can check the correctness of the mobile number by ringing the number being given by the person and check whether he receives the call when you ring up that number etc. etc. PLEASE TAKE IT, YOU HAVE EVERT AUTHORITY TO INSIST ON PRODUCTION OF A DOCUMENT THROUGH WHICH YOU CAN ESTABLISH THE ITENTITY OF THE PERSON PRESENTING THE CHEQUE TO YOU AS "Mr. VIJAY". If you fail in this aspect, then you are responsible and answerable.

If your senior manager insists, then get his approval on the cheque itself. DON'T BE AFRAID TO INSIST FOR THIS.

vikash singh 15 March 2018

Thanks a lot , Sir. U don't know how this information will help us to perforn our job safely...First of all most of us don't know that if a name is written over cheque then it's not a bearer cheque...I will share this information with my colleagues...