(A) All cheques are bills while all bills are not cheques. Explain the additional features of a cheque which differentiate a cheque from bill as per…

(A) According to the definition of cheque under section 6 of the Negotiable Instruments Act,1881, a cheque is a species of bill of exchange. Thus, it should fulfil all the essential characteristics of a bill of exchange. The following two features distinguish a cheque from bill (a) Must be drawn on a specified banker (b) It must be payable on demand Thus, all cheques are bills while all bills are not cheques. (B) Ambiguous Instrument: Section 17 of the Act, reads as: “Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either, and the instrument shall be thenceforward treated accordingly.” Thus, an instrument which is vague and cannot be clearly identified either as a bill of exchange, or as a promissory note, is an ambiguous instrument.