Does dishonoured cheque require both amounts in words?

Answer

A:

Yes. A cheque must contain the amount written both in words and in figures. This is a requirement under the banking system to avoid confusion or fraud. If there is a mismatch between the amount in words and the amount in figures, the bank may dishonour (bounce) the cheque.

1. Clarity and Accuracy – Writing the amount in both formats ensures there is no mistake in interpreting the cheque value.

2. Banking Rule Compliance – Banks in India are instructed not to pass a cheque if there is any discrepancy between the two.

3. Legal Enforceability – For a cheque to be valid under the Negotiable Instruments Act, 1881, it should clearly reflect the payable amount without ambiguity.

Mismatch between words and figures, for example, words show Ten Thousand but figures show 1,00,000.
Overwriting or correction of the amount without authentication.
Unclear or illegible handwriting leading to doubt about the correct sum.

If a cheque is dishonoured due to mismatch in words and figures, it is treated as cheque dishonour under Section 138 NI Act. The payee can still issue a legal notice and initiate action, as the liability remains valid even though the bank rejected the cheque on technical grounds.

Yes, a valid cheque must mention the amount both in words and figures. Any mismatch or error can result in dishonour. To avoid legal and financial issues, always write the cheque carefully and ensure both entries match exactly.