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Author - Associate Aswini Ramesh

What is dishonour of a cheque? 

In what situations a banker can dishonour the cheques? 

(The Article aims to provide answers to what is dishonoured cheque - in what situations a banker can dishonour the cheques or what can be the reasons for dishonour of cheque or why cheque is dishonoured?, dishonor of cheque meaning, meaning of dishonoured cheque, cheque can be dishonoured when, what does cheque dishonour mean, describe the circumstances of dishonour of cheque)

Now after knowing about cheque, the next question that arises is what is dishonoured cheque or meaining of dishonoured cheque ? So on presenting a cheque if the bank refuses to pay the amount mentioned on the cheque to the payee due to certain reasons then these can be the reasons for dishonour cheque. And we’ll know what is honouring and dishonouring of cheques

Dishonoured cheque cannot be further be used.

Illustration below answers - 

Ques) In what situations a banker is honouring and dishonouring of cheques?, dishonor of cheque meaning or reasons for dishonour of cheque or why cheque is dishonoured? cheque can be dishonoured when, what does cheque dishonour mean and describe the circumstances under which a cheque can be dishonoured?

Ans)

1. Insufficient funds- In case the account of the payer doesn’t have sufficient funds.

2. Material Alterations- any alterations on it like overwriting, corrections, missing of relevant details etc.

3. Irregular Signature- drawer’s signature on the cheque is different than that of the specimen signature available with the bank.

4. Post-dated cheque- date mentioned on the cheque is yet to come then.

5. State cheque- the cheque is presented to the bank for payment after three months from the date mentioned on it. 

6. ‘Stop payment instructions’- drawer has asked the bank to stop payment and not to pay for the cheque which is already issued.

7. Frozen account- the court or the government has ordered that a person’s account has to be frozen.

8. Account closed- drawer has closed the account before the cheque is presented.

These above mentioned points are the basic structure which states or through which we can say that on these basis we can know  honouring and dishonouring of cheques 

(The Article aims to provide answers to what is dishonoured cheque - in what situations a banker can dishonour the cheques or what can be the reasons for dishonour of cheque or why cheque is dishonoured?, dishonor of cheque meaning, meaning of dishonoured cheque, cheque can be dishonoured when, what does cheque dishonour mean, describe the circumstances of dishonour of cheque)

Describe the circumstances of dishonour of cheque---

Reasons for dishonour of cheque: [cheque can be dishonoured when or why cheque is dishonoured] 

(The Article aims to provide answers to what is dishonoured cheque - in what situations a banker can dishonour the cheques? dishonor of cheque meaning, meaning of dishonoured cheque, cheque can be dishonoured when, what does cheque dishonour mean, describe the circumstances of dishonour of cheque)

Following are the reasons for dishonour of cheque - {describe the circumstances under which honouring and dishonouring of cheques took place}

• Insufficient Funds : In case the account of the payer doesn’t have sufficient funds in order for the bank to pay the amount mentioned on the cheque to the payee then the cheque will be dishonoured.

• Material Alterations : A cheque will be dishonoured if there are any alterations on it like over writing ,corrections, missing of relevant details etc., 

• Irregular Signature : If the drawer’s signature on the cheque is different than that of the specimen signature available with the bank then the cheque will not be aacepted and treated as dishonoured cheque.

• Post- Dated Cheque : If the date mentioned on the cheque is yet to come then it is known as a post dated cheque and these are to be presented in the bank at a later date. For instance., If a cheque written on 30th July, 2019 bears the date 16th August, 2019, is a post - dated cheque and if this is presented to the bank before the mentioned date then this cheque will be dishonoured

• Stale Cheque : If any cheque is presented to the bank for payment after three months from the date mentioned on it, then it is known as a stale cheque. After expiry of that period the cheque will be dishonoured.

• ‘Stop Payment’ Instruction : If the drawer has asked the bank to stop payment and not to pay for the cheque which is already issued, then in such cases the bank will dishonour the cheque. 

• Frozen Account : In case, the court or the government has ordered that a person’s account has to be frozen then in such a case all cheques bearing that particular account number will be dishonoured by the bank.

• Account Closed : If the drawer has closed the account before the cheque is presented then the bank will dishonour that particular cheque.

So above mentioned reasons for honouring and dishonouring of cheques which might create problem for the payee and he/ she must get another cheque without the above mentioned errors.

(The Article aims to provide answers to - in what situations a banker can dishonour the cheques or what can be the reasons for dishonour of cheque?, dishonor of cheque meaning, meaning of dishonoured cheque, cheque can be dishonoured when, what does cheque dishonour mean, describe the circumstances under which a cheque can be dishonoured)

Keywords - reasons for dishonour of cheque, circumstances of dishonour of cheque, what is dishonoured cheque, why cheque is dishonoured, honouring and dishonouring of cheques