Q.9 Discuss the differences between a cheques and a bill of exchange.
|CHEQUE||BILL OF EXCHANGE|
It is an order, written by the drawer, to a banker to pay on demand a specified sum on the person named on it.
|It is an order written by the drawer to pay to the drawee a specified sum of money at a certain date.|
It is an order of payment to the bank
|It is an order of payment to the debtor or drawee.|
Its payment is made on demand.
|It’s (except sight bills) payment is always made according to its date.|
Its has three parties — viz., drawer, drawee, and payee.
|Sometimes, instead of drawee another person accepts it; therefore, it has four parties viz., drawer, acceptor, drawee and pyee.|
Its drawer is a customer or accountholder of a bank.
|Its drawer can be ordinary debtee or seller.
Its drawee is the bank (branch).
|Its drawee is the debtor or buyer.|
Its holder can be the accountholder, or endorsee.
|Its holder can be debtor, or drawer, or endorsee.|
It needs no acceptance for drawing from its drawee.
|It (except a sight bill) does need an acceptance for drawing from its drawee.|
It is a prescriptive printed-paper provided by the banker.
|It can be made on an ordinary plain paper.|
It can be crossed for its safety.
|It cannot be crossed.|
It is inland only; therefore, its amount is written in domestic currency.
|It (if is inland) amount is written in domestic currency, but in case of foreign bill in the relating foreign currency.|
It (except bearer cheqe) can be endorsed.
|It (all kinds) can be endorsed.
It use is very easy and frequent.
|It attaches complex obligations with it; therefore, it is not used frequently.|
It needs no further copies.
|It (if is inland) needs no further copies but in case of foreign bill three copies are made.|
|15. Due Date
It can be cashed from its issuing date and onto the next six months, but within banking hours.
|Its sue date is written on it.
|16. Days of Grace
It has no days of grace.
|It (except sight bill) has three days of grace.|
It cannot be discounted, and cannot be cashed before its issuing date.
|It can be discounted before its maturity date.
|18. Refusal of Payment
Its payment can be refused by the bank, say, when its value exceeds the fixed limits.
|Its payment is compulsory.|
It has three main kinds (only inland) viz., bearer cheque, order cheque, and crossed cheque.
|It has two main kinds – viz., inland bill, and foreign bill.|
|20 Revenue Stamps
It needs no imprinting of revenue stamp; rather government imposes excise duty on it.
|It does need imprinting of revenue stamps according to its value, and for a proof of it legal status|
|21. Excise Duty
It is issued with paying an excise duty to the government.
|It does not need any excise duty to be paid to the government.|
|22. Notice of Dishonour
It needs no notice of dishonour.
|It does need a notice of dishonour to inform the related parties.|
|23. Noting or Protesting
It needs no noting or protesting when
|It (if Dishonoured) does need noting. Further, in case of a foreign bill protesting follows noting.|
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