Banking · Negotiable Instruments Act
A customer presents a cheque where the amount in figures is ₹45,000, but the amount in words is written as 'Forty Thousand rupees only'. Under Section 18 of the Negotiable Instruments Act, which of the following is the legally sound position regarding the amount payable?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Pay ₹45,000 because numeric figures take precedence over written words.
- 2Pay ₹40,000 because under Section 18, the amount stated in words is the amount undertaken to be paid.✓
- 3Reject the cheque entirely as an invalid instrument under all circumstances.
- 4Pay ₹42,500 as an average compromise amount.
Correct answer
Pay ₹40,000 because under Section 18, the amount stated in words is the amount undertaken to be paid.
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