Dishonor of a Cheque

A cheque is draft drawn upon a bank payable on demand signed by the maker or drawer, containing an unconditional promise to pay a sum certain in money to the order of tha payee.Negotiable instrument lays down those cases in which a banker is justified in dishonoring a cheque and in which a bank is bound to dishonor the cheque.

Following are those circumstances in which a banker is justified in dishonoring a cheque:

Post-Date Cheque

Insufficient Balance

Funds set aside for Special purpose

Difference in words and figures

Where the banker has lien

Sealing of account

Forgery of Drawer’s signature

Cheque not presented within reasonable time

Violation of rules and regulations

Closing of Customer’s account

Where the customer has no account

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