BLANK CHEQUE IMPORTANCE

A R KHAN (Querist) 08 October 2009 This query is : Resolved
My channel partner do not want to provide blank cheques;to the company as a master /security cheques.

What is the legality behind if the cheque given to company is blank

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PJANARDHANA REDDY (Expert) 08 October 2009
CHQ IS A NEGOTIABLE INSTRUMENT,BLANK CHQ ALSO GIVEN AS SECURITY CAN BE CLAIMED AS LEGALLY ENFORCEABLE DEBT, IT ATTRACTS SEC 138 OF NI ACT.

Raj Kumar Makkad (Expert) 09 October 2009
Better execute a written agreement mentioning therein that such and such cheques are being deposited blank as security and can be used at later stage at appropriate time by giving prior notice to the drawer of the cheque. I think drawer shall have no objection to give his blank cheques in such circumstances. Provide one copy of agreement to him also.

Sachin Bhatia (Expert) 09 October 2009
Blank cheques can easily be missused by anyone, that's why your channel partner did not want to provide blank cheques. Better execute a written agreement mentioning therein that these cheques are being deposited as security.

Adinath@Avinash Patil (Expert) 09 October 2009
BETTER EXECUTE AGREEMENT MENTIONIG THE BLANK CHEQUES ARE ONLY FOR SECURITY.IN FUTURE THE SAID CHEUES CAN BE DIPOSITED WITH THE PROR INTIMATION.

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