Section 6 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 6 defines a "cheque" as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. It also says the term includes the electronic image of a truncated cheque and a cheque in the electronic form, and three Explanations define the terms used. This article reads it as per the consolidated text consulted.
A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. The term includes the electronic image of a truncated cheque and a cheque in the electronic form. A truncated cheque is one truncated during a clearing cycle, and "clearing house" means one managed or recognised by the Reserve Bank of India.
The definition
The first sentence of section 6 says that a "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, and that it includes the electronic image of a truncated cheque and a cheque in the electronic form.
Break that down:
| Element | Meaning |
|---|---|
| A bill of exchange | All the requirements of section 5 must be met: writing, unconditional order, signature of the maker, certain sum, certain payee. |
| Drawn on a specified banker | The drawee must be a banker, and a specified one. Section 3 says "banker" includes any person acting as a banker and any post office savings bank. |
| Not expressed to be payable otherwise than on demand | A cheque cannot be made payable at a future date on its face; it is a demand instrument. |
| Includes the electronic image of a truncated cheque | The image used in clearing is within the definition. |
| Includes a cheque in the electronic form | A cheque created electronically is within the definition. |
If you are unsure whether a particular payment instrument qualifies as a cheque, a legal consultation before you rely on it in a dispute is worthwhile.
Why "bill of exchange" matters
Because a cheque is a bill of exchange, the drawer of a cheque gives an order to the bank, the bank is the drawee, and the person to be paid is the payee. Those terms are defined in section 7. A cheque is simply the most familiar kind of bill: one addressed to a banker and payable on demand.
Why "on demand" matters
The words "not expressed to be payable otherwise than on demand" mean that if the instrument itself says payment is to be made on a future date or after a period, it is not a cheque within this definition, though it may still be a bill of exchange. This is the text's own test, and the copy consulted does not discuss post-dated cheques. For that topic, see our guide on the post-dated cheque and section 138.
Explanation I: two new terms
Explanation I defines two expressions "for the purposes of this section".
(a) "A cheque in the electronic form"
The text says it means a cheque drawn in electronic form by using any computer resource and signed in a secure system with digital signature (with or without biometrics signature) and asymmetric crypto system or with electronic signature, as the case may be.
Taking the words in order:
- It is drawn in electronic form, using any computer resource.
- It is signed in a secure system.
- The signing is by digital signature (with or without biometrics signature) and asymmetric crypto system, or by electronic signature, as the case may be.
(b) "A truncated cheque"
The text says it means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.
In plain words: a paper cheque is scanned and its electronic image is generated; from that moment the image travels instead of the paper. The truncation can be done by the clearing house or by the bank, whichever bank is paying or receiving payment. After truncation, the cheque in writing does not move further.
Explanation II: "clearing house"
The text says the expression means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India. The copy consulted gives no list of clearing houses and says nothing about how recognition is granted; this article adds nothing on that.
Explanation III: borrowed meanings
The text says that "asymmetric crypto system", "computer resource", "digital signature", "electronic form" and "electronic signature" have the same meanings respectively assigned to them in the Information Technology Act, 2000. The copy does not reproduce those meanings. A reader who needs the precise technical definitions should consult that Act directly.
A worked example
Krishna Traders in a city draws a cheque on its current account with a bank for a stated sum in favour of a supplier. The cheque is a bill of exchange (a written, signed, unconditional order), is drawn on a banker, and says nothing about a future date. It is a cheque. The supplier deposits it with its own bank. During the clearing cycle the cheque is scanned and its electronic image is sent on for payment instead of the paper. That is truncation as the text describes it, and the image is within the definition of a cheque.
Take a second case. A buyer sends its supplier an instrument ordering a banker to pay a sum "sixty days after sight". It is a bill of exchange and is drawn on a banker, but it is expressed to be payable otherwise than on demand. On the words of section 6 it is not a cheque.
What the section does not say
The text of section 6 does not state any time limit for presenting a cheque, any charges, any procedure for clearing, or any criminal consequence of a cheque that is not honoured. Those subjects are dealt with in later sections; for the dishonour provisions see our post on section 138.
Need help with a cheque dispute?
If a cheque you issued or received is in dispute, we can check whether the instrument fits the definition in section 6 and what steps are open. Start by talking it through in a legal consultation.
Key takeaways
- A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
- The definition includes the electronic image of a truncated cheque and a cheque in the electronic form.
- A cheque in the electronic form is drawn using a computer resource and signed in a secure system with digital or electronic signature.
- A truncated cheque is truncated in a clearing cycle, on generation of an electronic image, replacing the further physical movement of the cheque.
- "Clearing house" means one managed, or recognised as such, by the Reserve Bank of India.
- Technical terms in Explanation III take their meanings from the Information Technology Act, 2000.
Read next
- Section 5: bill of exchange
- Section 7: drawer, drawee, acceptor and payee
- Section 138: cheque bounce
- Types of negotiable instruments
Disclaimer: Based on a consolidated text of the Negotiable Instruments Act, 1881 stating the position as of 26 December 2015 and on the Negotiable Instruments (Amendment) Act, 2018, as consulted on 2 October 2026. Later amendments and current criminal procedure law should be checked. This article is general information, not legal advice; check the official text before acting.