Active Stocks
Fri Dec 01 2023 15:59:55
  1. Tata Steel share price
  2. 129.95 1.56%
  1. Reliance Industries share price
  2. 2,393.45 0.72%
  1. NTPC share price
  2. 269.05 2.97%
  1. ICICI Bank share price
  2. 946.35 1.19%
  1. HDFC Bank share price
  2. 1,555.5 -0.22%
Business News/ Money / Personal Finance/  Use single ink to fill in your cheques
Back Back

Use single ink to fill in your cheques

Negotiable Instruments Act’s Section 87 says a material alteration in a negotiable instrument renders it void, the only exception being when the other party consents to the alteration
  • If you are issuing a cheque in question, ensure that you ‘cross’ the cheque
  • Photo: iStockPremium
    Photo: iStock

    Filling up a cheque or similar handwritten payment instrument? Ensure that you fill up the entire instrument using a single ink. Section 87 of the Negotiable Instruments Act, 1881, which governs lending and payment instruments such as promissory notes and cheques, says that a material alteration in a negotiable instrument renders it void, the only exception being when the other party consents to the alteration.

    In a judgment dated 21 June 2019 in the case of Mallika versus Kasi Pillai, the Madras High Court ruled a negotiable instrument written in different inks is also invalid under the Act. The plaintiff had filed a suit to recover money under a promissory note of 35,000 along with interest on it. However, the court observed that the number ‘3’ was written in blue ink, while ‘5000’ which was written in green ink. The plaintiff was unable to explain why two different inks were used. The court held the alteration to be a “material alteration" rendering the promissory note void under the Act.

    Other Precautions

    Although online transfers are replacing handwritten cheques, the latter are still used, especially for high-value transactions like paying monthly rent or while buying or selling property. It is especially common for landlords to ask for post-dated cheques for several months or the entire term of the lease/rental agreement in advance. If you are accepting such cheques, ensure that they are filled in the same ink.

    If you are issuing the cheque in question, ensure that you “cross" the cheque. This is done by drawing two lines across the upper left-hand corner of the cheque. You can also cross out “bearer" at the end of the line stating the recipient’s name. These two precautions will ensure that only the beneficiary named in the cheque can get the money mentioned in it. Without these precautions, the cheque can be encashed by any bearer who may not be the intended recipient and who gets his hands on the cheque through unlawful means.

    Also, check the dates on cheques. A cheque is only valid for three months from the date of issuance.

    Milestone Alert!
    Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

    Neil Borate
    Neil heads the personal finance team at Mint. A former colleague called them 'money nerds' and that's what they are. They cover topics like mutual funds, taxation and retirement, all to improve your chances of building wealth. Neil graduated with a degree in law and economics. He passed the CFA Level I exam and began his writing career at Value Research, a mutual fund research firm in 2016. He joined the personal finance team Mint in 2019. Everyday, the Mint Money Team tackles personal finance questions such as where to invest and where to borrow, through articles, charts and reader queries. They also have a daily podcast - 'Why Not Mint Money' and an annual ranking of mutual funds - the Mint 20.
    Catch all the Elections News, Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Updated: 24 Jul 2019, 12:01 AM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App