Question

A cheque is defined under section..........of............ Act

• A. 6 of RBI Act
• B. 6 of BR Act
• C. 6 of NI Act
• D. 6 of Indian contract Act

Answer 1

Answer:

C. 6 of NI Act

Negotiable Instruments Act, 1881

• The Negotiable Instruments (NI) Act, 1881 governs instruments like cheques, promissory notes, and bills of exchange in India.

• Section 6 specifically defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.

• The definition includes the electronic image of a truncated cheque and a cheque in the electronic form.

Key Legal Components

• Drawer: The person who signs and issues the cheque.

• Drawee: The bank on which the cheque is drawn.

• Payee: The person to whom the money is directed to be paid.

• Demand Instrument: A cheque is always payable on demand, unlike some other negotiable instruments.

Important Related Provisions

• Section 5: Defines a 'Bill of Exchange'. A cheque is a specialized type of bill of exchange.

• Section 13: Defines a 'Negotiable Instrument'.

• Section 138: Deals with the dishonour of cheques for insufficiency of funds, which is a significant legal provision frequently tested in examinations.

• Section 143A & 148: Recent amendments that empower courts to order interim compensation in cheque dishonour cases.