Employment Bond Dilemma: Can My Former Employer Cash an Unsigned Cheque?

I have been given a blank cheque and an employment agreement for one year. However, I did not sign the cheque. Now, he is saying that he will default on the cheque. Is this possible?

Hi, I am Manikanth. I worked in a start-up where I signed an employment bond and gave a blank cheque. I left the job after 3 months. Now he is saying he will default on the cheque. But I didn't sign the cheque. So, is it valid?

If you have not signed the check, how can it be encashed? Or was the amount column not filled in?

An unsigned cheque does not carry any obligation, and no action would lie against you under the Negotiable Instrument Act, 1881. But be sure about it!!!

The unsigned check does not carry any value. Your employer cannot present this check before the bank for encashment since it is a void instrument.

Further, the account holder can also send instructions to the bank for "Stop Payment" or 'Hold'.

Prabhat,

Stop payment would not be appropriate. It is unsigned, and the said cheque has no financial value.

Understanding the Legal Significance of a Stop Order

Please understand that the issuance of a stop order is not as simple as it may seem. It holds legal significance. You can refer to the following link for general information: https://www.telegraphindia.com/11409...y_18786854.jsp

In the case mentioned, the cheque is rendered worthless due to the absence of a signature. Stop payments cannot be issued without a valid cause.

Considering the prevalent practice of issuing cheques that bounce and the various cunning methods employed to evade payment, the Legislature has chosen to adopt a no-nonsense stance (as per Section 138 of the Negotiable Instruments Act and court judgments).