Lawblog4u
There are many types of cheque available related to the banking transaction and the bearer cheque is also among them. The account holders can use this cheque facility to make their money transactions easy and safe. Here we will discuss the bearer cheque.
(1) What is bearer cheque?
When on the right side of the cheque specifically mention the word “ bearer” and that word not to canceled or remarked, means that cheque called a bearer cheque.
The bearer cheque means anyone who has possession of the cheque can eligible for presenting the said cheque in the bank and encash the cheque.
In the case of B.SARVOTHAMA vs. M.HANEEF, (2013) 5 KLJ 89, Karnataka High Court has observed that “Once a bill of exchange is issued as payable to bearer, it remains always a bearer.
The bearer cheque may be risky for the banking transaction because, the issuer of the cheque would just, writes the amount and attaches his signature and nothing else.
If bearer cheque lost and anyone who finds it can be misused and easily encash the cheque due to the reason of its bearer. This type of cheque is negotiable from the date of issue to three months. The validity of the bearer cheque is also three months like other types of cheques and after the completion of three months, It has to be revalidated before presenting it to the bank.
(2) Can bearer cheque present to any branches of the base bank?
Yes, according to the Hon’ble High Court of Delhi in the case of GE Capital Transportation Financial Services Limited vs. Rahisuddin Khan, (2011 (125) DRJ 695 ), has held clearly that, “a bearer cheque can be presented to any branch of the bank and not particularly to the branch where the drawer has the account and the said cheque will be honoured by the said branch of the bank if the customer’s account has the sufficient amount to honour the said cheque since all the branches are interlinked. The base branch or any other branch does not have any legal identity of its own other than the bank.
(3) Can dishonour of bearer cheque attract to cheque bounce case?
To give the perfect answer to this question, here we should be observed some various propositions and circumstances of the law and, when other conditions were satisfied which are given below then dishonor of bearer cheque can be attracted to cheque bounce case.
also read: What is the effect if Drawer’s Signature differs can it attract to cheque bounce case?
(1) In the case of Adigear International and others vs. State and another,(2014 (206) DLT 307 ), the Delhi High Court held that even in the context of “self drawn” bearer cheques has also held that once the issuance of cheques is admitted and as the words “or bearer” have not been stuck off, the complainant is held to be the holder of the said cheques in due course though it was written as self and thus, he is entitled to receive the cash and on dishonor of the said cheques can very well file the complaint.
(2) In the case of Intech Net Limited, M/s. and Ors v. State and Anr, (2007 CRI.L.J.216), the Andhra Pradesh High Court held that Once the issuance of the cheques is admitted and as the words “or bearer” have not been struck off, the complainant is held to be the holder of the said cheques in due course though it was written as self and thus he is entitled to receive the cash and on dishonouring of the said cheques, he can very well file the complaint, would be entitled to invoke S.138 NI Act, in case of dishonour of the same.”
(3) In the case of Mahesh Goyal Petitioner v. S. K. Sharma, (1997 (4) All Cri LR 646), the Punjab and Haryana High Court held that It is not an ingredient of S. 138 that the cheque should be drawn in the name of another person. All that is required is that the cheque should be drawn by the person from the account maintained by him. It can be drawn in his own name as self or in the name of the third person. It should be payment of the amount due and for the discharge of that debt. There are certain conditions before the strict provisions of S. 138 of the Act would be attracted and the same have to be satisfied. The expression “holder in due course” is clear and unambiguous. A holder in due course is a person who is a possessor of an instrument even then it is payable to bearer. He must be in possession of it. If the bill is payable to holder then he has to be a payee or indorse of the same. Thus, where the cheque indicates that it was addressed as payable to “self” and that the word bearer has not been deleted and there were certain transactions alleged and the money was claimed to be due and the respondent was in possession of the same and presented it before the bank, but it was dishonoured, the respondent is obviously holder in due course particularly when other conditions were satisfied.
(4) In the case of Michael Kuruvilla Vs Joseph J.Kondody (1998 (1) KerLT 384), the Kerala High Court held that though the cheque does not contain the name of the payee and the printed words “or bearer” are struck off and also it is written pay to cash, is a legal and valid negotiable instrument. It has to be implied that the direction is to pay to the bearer and there is nothing on record to show that the appellant cannot be treated as a holder in due course as contemplated under Section 9 of the Act. Held that the accused was guilty of the offence and accordingly convicted him for the said offence under Section 138 of the NI Act.
(5) In the case of Prabhakaran Vs Natesan (1998 (4) Crimes(HC) 554), the Madras High Court held that once the complainant becomes the bearer and he presented the cheque for encashment, virtually the complainant becomes the holder in due course and as such, it could very well be said that he is competent to file a complaint on the non-payment of the cheque amount after dishonour of the cheque.
(6) In the case of Farhat Hussain Siddiqui vs. State of Uttar Pradesh, 2010 Cri. LJ 1213, The Allahabad High Court held that a bearer cheque issued in discharge of a debt or other legal liability would enable the person in possession of the same to claim as a holder in due course, as defined under Section 9 of the NI Act, even though the cheque is payable to bearer.
