Cheque Payment Tips: Avoid These Common Mistakes to Prevent Loss or Legal Trouble

Cheque Payment Tips: Avoid These Common Mistakes to Prevent Loss or Legal Trouble Newspoint | 20/05/2025 04:39:13

Even in today’s digital age, cheque payments remain a preferred method for many people, especially when dealing with high-value transactions. However, using cheques requires caution. A minor error can result in financial losses or legal issues, including cheque bounce penalties. If you still use cheques, it’s vital to understand the dos and don’ts to ensure safe and valid transactions.

✅ Essential Things to Remember Before Issuing a Cheque 1. Write the Correct Date

Always mention the accurate date on the cheque — the same day you issue it.

Wrong date = Cheque rejection
A correctly dated cheque shows validity (3 months from issue) and helps in maintaining financial records.

2. Use Permanent Ink (Never Pencil or Erasable Pen)

Always fill the cheque using blue or black permanent ink.

Prevents tampering or overwriting.
Enhances cheque’s security against fraud.

3. Ensure Sufficient Balance in the Account

Before signing and issuing a cheque:

Make sure your account has enough balance.
Cheque bounce due to insufficient funds is a criminal offense under the Negotiable Instruments Act, 1881.
You could face a fine and even imprisonment.

4. Write the Payee’s Name Clearly

Mention the name of the person or organization in clear, legible handwriting.

Avoid nicknames or spelling errors.
Mismatched or unclear names can result in delayed processing or rejection.

5. Sign Carefully — Match with Bank Records

Always sign using the same signature recorded with your bank.

Mismatched signature = Cheque rejection
Don’t sign in haste or with a different style.

6. Avoid Leaving Blank Spaces

When writing:

Payee’s name
Amount in numbers
Amount in words

Avoid leaving unnecessary gaps between words and numbers. For example:

Write “Rupees Ten Thousand Only” rather than “Rupees Ten Thousand Only”
This helps prevent fraudulent additions or tampering.

7. Ensure Amount in Words and Figures Match

Banks validate the cheque amount using both words and figures. If there is any mismatch:

The cheque may be rejected.
Always double-check both values before handing over the cheque.

⚠️ What Happens If a Cheque Bounces?

If your cheque gets dishonored:

You may receive a legal notice.
Under Section 138 of the Negotiable Instruments Act:
- You may face a fine up to twice the cheque amount.
- Imprisonment of up to 2 years is also possible.

📝 Final Tips for Safe Cheque Usage Tip Why It Matters

Use A/C Payee cheques	Ensures the cheque is deposited only into the intended recipient’s account
Avoid post-dated cheques	Reduces confusion or rejection
Always keep a photo/photocopy of the cheque	Useful in case of disputes
Use cheque books from verified bank branches	Ensures authenticity

🧠 Conclusion

Though digital payments dominate today’s economy, cheques are still legally valid and often used in formal transactions. However, small mistakes while issuing cheques can result in major losses or legal trouble. Always double-check details, ensure the correct signature, and maintain sufficient balance before issuing a cheque.

By following these simple yet essential tips, you can avoid cheque-related complications and ensure your transactions go smoothly.