Difference between Promissory note, Bill of Exchange and Cheque | Negotiable Instrument Act 1881

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Difference between Cheque , Bill of Exchange and promissory note
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ADVERTISEMENTS:
As a general rule, the provisions applicable to a bill of exchange payable on demand apply to a cheque, yet there are a few points of distinction between the two, namely:
1. A cheque is always drawn on a banker, while a bill of exchange may be drawn on any one, including a banker.
2. A cheque can only be drawn payable on demand; a bill of exchange may be drawn payable on demand, or on the expiry of a certain period after date or sight.
ADVERTISEMENTS:
3. A cheque does not require acceptance and is intended for immediate payment while a bill of exchange must be accepted before payment can be demanded.
4. A grace of three days is allowed in the case of payment of a time bill of exchange, while no grace is given in case of a cheque.
5. The drawer of a bill of exchange is discharged, if it is not presented for payment, but the drawer of a cheque is discharged only if he suffers any damage by delay in presentation for payment.
6. Notice of dishonour of a bill of exchange is necessary, but not in the case of a cheque.
ADVERTISEMENTS:
7. A cheque being a revocable mandate, the authority may be revoked by countermanding payment, and is determined by notice of the customer’s death or insolvency. This is not so in the case of a bill of exchange.
8. A cheque may be crossed, but not a bill of exchange.
9. A cheque does not require any stamp whereas except in certain cases, a bill of exchange must be stamped.
Difference Between Cheque And Promissory Note
Promissory Note is a written promise made by one person to pay certain sum of money due to another person or any other legal holder of the document. Whereas A cheque is an unconditional order, in writing addressed by a customer, with signature, to the bank requiring it to pay on demand a certain sum of money to the order of a specified person or to the bearer.
There are two parties in the promissory note - the Maker and the Payee. Whereas in case of cheque, there are three parties - the drawer, drawee and payee.
In case of Promissory Note, acceptance is not necessary but in case of cheque, acceptance is required before it is presented for payment
Promissory note can never be conditional but cheque can be conditional
The maker of Promissory Note cannot pay to himself but in case of cheque, drawer can be payee.
While a cheque is a one time payment, a promissory note is a promise made to pay back a loan; either in installments or in one go at a later date.
Cheque is drawn on a bank whereas promissory note can be made by any individual in favour of another person.
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