Reporting by: Amit Kashyap.
The issuing party is called the drawer of the cheque, and the one it is issued to or put simply, whose name is mentioned on the cheque is the Payee.
“REFER TO DRAWER” means that the cheque you have presented to your banker has not been honored and you need to refer the issue to drawer of the cheque. This happens when the drawer’s bank account is short of funds and the cheque bounces due to insufficient funds.
As per law(as per secrecy acts) banks cannot disclose the balances in the accounts of customers to third parties. Hence banks use this terminology when à cheque is returned for want of sufficient balance in the account.
“Insufficient funds” attracts provision of Section 138 of NI Act and you can file a cheque bounce case against the drawer of the cheque under Section 138 of NI Act after sending a demand notice the drawer for payment of the amount under cheque and giving him 15 days to respond.
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Judgements In Criminal Law 