Abstract:

Since cheque is a means of payment, in terms of holder it creates a justified expectation that the cheque has provision and will be paid. However, there is no a definite guarantee that cheque has provision and will be paid. Because, when the cheque is presented in case there is no or inadequate provision at the account, the bank does not have any liability against to holder. This revealed the confidence-building statements of banks similar to acceptance in the bill of exchange. Thus, it has been come to order that the bank make a commitment concerning cheque amount will paid after drawing cheque on the application of both to the drawer and holder. Certification of the cheque by the bank makes the bank liable against to holder from the cheque amount without regard to provision is available or not. However, this liability is not arising from the exchange commitment, but it is arising out of the general provisions.

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