One should change his cheque writing behaviour as the RBI's new cheque writing Guideline has become effective on and from the 1st July, 2010. Section 1.8 of the Annexure to RBI Circular DPSS.CO.CHD.No.1832/04.07.05/2009-2010 dated February 22, 2010 specifically deals in "Prohibiting alterations / corrections on cheques". The Section is reproduced hereunder:
"Prohibiting alterations / corrections on cheques : No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations."
As such the bank will return or reject a cheque having alteration on - (i) Payee's name, (ii) Amount in figure and (iii) Amount in words. However, in terms of the said Section the date alteration will be allowed.
Impact of the new guideline : One must be very careful in writing a cheque, as any casual mistake will result in dishonour of the cheque by the bank and such dishonour will cost both in time and money.
Other aspects of the new cheque writing guideline : In case of a dishonour of a cheque under certain circumstances, Section 138 (Dishonour of cheque for insufficiency, etc., of funds in the accounts) of THE NEGOTIABLE INSTRUMENTS ACT, 1881 is attracted. The Section provides for punishment to the drawer of the cheque being dishonoured under the circumstances specified in the Section.
Now this is to see whether the dishonour of cheque by the bank in view of the aforesaid guideline also attracts that Section 138 or not. We have to wait till such occasion of cheque dishonour and the matter is decided in the Hon'ble Court.
