Ram Rattan v. Parma Nand
Rule established
An instrument drawn on a bank payable on demand is a cheque under S.6 regardless of the name given to it; substance prevails over form
Facts
- An instrument was drawn on a bank payable on demand but was described as a "hundi" rather than a "cheque"
- The question arose whether it attracted the provisions applicable to cheques under the NI Act
Issue
- Whether an instrument meeting all essentials of S.6 (drawn on a specified banker, payable on demand) is a cheque regardless of its nomenclature.
Held
- S.6 requires: drawn on a specified banker + payable on demand. If both conditions are met, the instrument is a cheque by law regardless of what the parties call it. The label ("hundi," "order," etc.) is irrelevant. Substance prevails over form.
Ratio Decidendi
An instrument satisfying the S.6 definition is a cheque regardless of nomenclature. The legal character is determined by substance (drawn on banker + demand), not by the label given by parties.
How to use it in an exam
Use for S.6 definition questions and substance-over-form principle. Key line: "If drawn on a banker and payable on demand, it is a cheque under S.6 regardless of the name used."
Source
Source: AIR Lahore
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.
Cited in study notes
Bankers Drafts Dividend Warrants and Other InstrumentsClassification of banking instruments