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.
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.