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Can I take security blank cheques without date and amount mentioned in that cheque from our distributors for the credit we give against our supply?

We are manufactures and have a distribution network for our product. We appoint distributors and sign an agreement with them. We have to give them credit as per the market trends. We want to secure our credit by taking security blank cheques without date and amount so that we can present in our bank account in the worst case. If the situation is further worse then can go for legal action against them for the outstanding amount. We want to confirm if this is legally okay. If we can take blank
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General Legal
Posted on 5th Jul, 2018
Advocate Rachit
Answered on 02-Aug-18
Yes, you can take the blank cheques as a security. In this regard, it is suggested that the cheques are provided by a company and not by individual. This will provide a criminal recourse against all the directors of the Company - in case of dishonor of cheques. The to-be introduced amendments in the Negotiable Instruments act will provide the much needed improvement for enforcing cheque bouncing situation.
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