CHAPTER 2
CHEQUES AND BILLS

2.1     Under the Scheme of Departmentalisation of Accounts, payment of claims against Government is made by Pay and Accounts Offices of diverse Ministries/Departments by cheques drawn on branches of Reserve Bank of India or Public Sector Banks accredited to the Ministry/Department. The cheques are issued in settlement of claims made in prescribed bill forms and submitted to a Pay and Accounts Office.

2.2     The cheques in settlement of claims against the Government may be any one of the following three categories, viz.

Category I—Negotiable:—These are meant for payment of personal claims, such as payment to members of staff on account of' personal claims, payments to contractors and suppliers and to companies, corporations, etc. These are drawn as 'payable to' or 'to the Order of the Payee'. Normally, such cheques are to be crossed 'Account Payee' when they are in excess of a certain amount.

Category II—Non-Transferable:—These cheques are to be issued when the payee is a Government Officer, for disbursement of salaries etc. of the staff and for expenses on office contingencies. These cheques are drawn in favour of the 'Payee' by his official designation and contain the superscription 'Not Transferable'.

Category III—Not-Negotiable and not Payable in cash— Creditable to Government Account only:—These cheques contain the superscription 'Government Account'. These are meant for payment of Inter-Departmental or Inter-Governmental claims.

2.3     When claims are preferred in the appropriate bill form to the Pay and Accounts Office, the latter exercises  the prescribed checks and if the claim is in order, the bill is passed for payment by recording a 'Pay Order' on the bill. The cheque is prepared on the basis of the Pay Order. Each cheque prepared by the  Cheque-writer is entered in the Register of Cheques Drawn' (Form CAM-10). Immediately after the delivery/despatch of the cheque, the cheque section enters the particulars of the cheques delivered in the 'Register of Cheques Delivered' (Form CAM-11). At the end of the month date-wise amount of cheques delivered is summarised and compared with the net total of vouchers posted in the compilation sheet. After reconciling the figures, the total amount of cheques delivered during the month by the Pay and Accounts Office is accounted as credit under the Major Head '8670—Cheques and Bills—102  Pay and Accounts Offices Cheques '(PAO Cheques)'.

2.4     In certain cases Departmental Officers have been authorised to make payment by means of cheques drawn on branches of the Reserve Bank of India or accredited Public Sector Banks. These officers, known as Cheque Drawing DDOs (Drawing and Disbursing Officers) issue cheques in payment of certain claims in respect of their own office and other offices of the same Ministry/Department located at the same station or nearby stations after exercising necessary checks. The Cheque Drawing DDOs after making payments prepare a 'List of Payments' at the end of each week and send the same duly supported by paid vouchers to the Pay and Accounts Office. The Pay and Accounts Office compiles the paid vouchers received from the cheque drawing DDOs in its books. The total amount of cheques issued by each DDO during a month as verified from the 'List of Payments' is credited to the minor head '103 Departmental Cheques' Under Major Head '8670—Cheques and Bills'.

2.5     The paying branch of the Reserve Bank of India prepares daily payment scrolls and sends two copies of the same to the Pay and Accounts Officer alongwith the paid cheques. In case of accredited Public Sector Banks, the paying branch of the bank  sends two copies of the daily payment scrolls duly supported by paid cheques to the designated 'Focal Point' branch of the accredited bank. One copy of the scroll is also sent to the Cheque Drawing DDO, if the payment scroll pertains to the cheques issued by him. The 'Focal Point Branch', after consolidating the transactions of various branches accredited to the Pay and Accounts Office, prepares a 'Main Scroll' and sends two copies thereof with the original copy of the 'Payment Scroll' received from the paying branch alongwith the paid cheques to the Pay and Accounts Office.

The Pay and Accounts Office verifies the 'Main Scroll' to see that all the cheques included in the scroll were issued by it or by the Cheque Drawing DDOs under its payment control and that the payment recorded on the scroll tallies with the amount shown in the paid cheques. Thereafter, the duplicate copy of the 'Main Scroll' is returned duly certified to the 'Focal Point Branch'. The Pay and Accounts Office posts the total of each day's payments as per Main Scroll of payment in the 'Register of Public Sector Bank (PSB) Suspense'/Reserve Bank Deposits (Form CAM-17) and in the 'PAO's Check Register of Outstanding pre-check Cheques' (Form CAM-15).

The procedure is explained in the following example:-

(i)     Suppose as per 'Register of Cheques Delivered' (CAM-11) the totals as on 2-8-89, 10-8-89  and  11-8-89  are  Rs.5,20,268,  Rs.4,11,121 and Rs.2,10,69,546 respectively. These figures get reflected in the date-wise summary which is prepared at the end of each month showing the cheques delivered during the month. The Pay and Accounts Officer completes col. 2 of PAO's Check Register of outstanding pre-check Cheques (CAM-15) for 8/89 with reference to the summary. Similarly, daily main payment scrolls are received from the paying branch of the bank through Focal Point Branch. Suppose the daily main scrolls listing paid cheques for 10-8-89, 14-8-89, 16-8-89 and 17-8-89 showed total payment of Rs.5,64,220.00,  Rs.16,69,216.00,  Rs.37,25,531.00 and Rs.2,36,33,672.00 respectively. These date-wise payments are also noted in CAM-15 and CAM-17 against the concerned dates. After receipt of the Date-wise Monthly Statement (DMS) which shows the date-wise figures of receipts as well as payments, the figures as noted in the Register in CAM-15 and CAM-17 mentioned above are tallied with the date-wise figures of payment noted in the DMS. In the Register in Form CAM-17, the date-wise totals of receipts as per receipt scrolls are also noted and subsequently checked with reference to the DMS.

The specimen entries in the various Registers would be as under:

(a) Register of Cheques Delivered (Form CAM-11)

Date 2-8-89                     (Separate sheet for each day)

Srl. No. Cheque No. To whom issued Voucher No. Token No. Amount
1. A011873 Sh. P.R. Singh 305 101 1781.00
2. A011874 Sh. M.A. Ahuja 306 103 604.00*
3. B000740 Section Officer A&B 307 104 34,048.00*
4. A011897 M/S Haryana Handlooms 351 105 98,555.00
    x x XX XX XX
    x x XX XX XX
        Total 5,20,268.00

* Encashed in 8/89

(b) Summary of Register of Cheques Delivered:

Date

Amount

XX XX
2-8-89 5,20,268.00
XX XX
10-8-89 4,11,121.00
11-8-89 2,10,69,546.00
XX XX XX
XX" XX XX
  TOTAL:     6,66,78,307.00

 

(c) Payment Scroll

Bank of India, Parliament Street, New Delhi
Name of Drawer-Department........      D.M. No..........     Date 10-8-89

Srl. No. Particulars of cheques Cash Clearing Total Initials
  B000740 34,048.00   34,048.00
  A 00874   604.00 604.00
  XX XX XX XX
  XX XX XX XX
    1,85,380.00 3,78,840.00 5,64,220.00

(d) PAO's Check Register of Outstanding Pre-check Cheques (CAM-15)

For the month ending August-89

Date Amount of cheques delivered Amount of cheques encashed
1 2 3
XX XX XX
2-8-89 5,20,268.00 XX
XX XX X
10-8-89 4,11,121.00 5,64,220.00
11-8-89 2,10,69,546.00 XX
XX XX XX
14-8-89 XX 16,69,216.00
16-8-89 XX 37,25,531.00
17-8-89 XX 2,36,33,672.00
XX XX XX
XX XX XX
  6,66,78,307.00 5,59,70,554.00
Summary for the Month ending 8/89
Amount of cheques outstanding at the end of previous month 1,03, 43,057.00
Add amount of cheques delivered (Total Column 2) 6,66,78,307.00

Total:

7,70,21,364.00
Deduct Amount of cheques encashed/cancelled
(Total Col. 3)
5,59,70,554.00
Balance Amount of cheques outstanding 2,10,50,810.00

Certified that the above balance has been tallied with the list of cheques 
outstanding and found to be correct.

PAY AND ACCOUNTS OFFICER.

(e) Register of PSB Suspense/RB Deposits (CAM-17)

Date Payments as per 
PSB's daily scroll
Receipts as per 
PSB's daily scroll
Remarks 
(Discrepant items if any 
to be indicated)
Initials
1 2 3 4 5
XX XX XX XX  
XX XX XX XX
10-8-89

5,64,220.00

XX XX  
XX XX XX XX
14-8-89 16,69,216.00 XX XX  
16-8-89 37,25,531.00

36,596.00

XX  
17-8-89 2,36,33,672.00 XX XX  
XX XX XX XX
XX XX XX XX  
  5,59,70,554.00 7,32,456.00  

(f) Report to be prepared by Compilation Section at the end of each month

8/89

Opening balance Rs.1,03,43,057.00
Cheques issued during 8/89 Rs.6,66,78,307.00

Total: 

Rs.7,70,21,364.00
Cheques encashed during 8/89             Rs.5,59,70,554.00
Closing Balance Rs.2,10,50,810.00

List of outstanding cheques

        Cheque No.        Date Amount
XX XX XX
A011873     2-8-89     1,781.00
A011897 2-8-89 98,555.00
XX XX XX
XX XX XX
   

2,10,50,810.00

(g)     Date-wise Monthly Statement

Month............     Receipts and Payments
Name of the Bank.............................       Code No..........
Name of Focal Point Branch.....................Code No........
Ministry/Department..........................        Code No........

Sl.No. Date Receipts Payments Initials
1 2 3 4 5
  XX XX XX  
  10-8-89 5,64,220.00  
  14-8-89 16,69,216.00  
  16-8-89

36,596.00

37,25,531.00  
  17-8-89 2,36,33,672.00  
  XX XX XX  
  XX XX XX  
   

     7,32,456.00

    5,59,70,554.00

 

Dated: 2-9-89                                 Branch Manager

 

2.6     The 'Date-wise Monthly Statement (DMS)' is received by the Pay and Accounts Office from the Focal Point branch in quadruplicate. It scrutinises the DMS with reference to the daily Main Scrolls and returns two copies of the DMS to the Focal Point Branch, duly verified. It also tallies the total of the date-wise payment columns in the 'Register of PSB Suspense/R. B. Deposits' with the amount shown in the 'Date-wise Monthly Statement as indicated above. After reconciliation of the figures, the Pay and Accounts Office prepares a Transfer Entry to adjust the transactions in its accounts as under:- 

(—) Cr. 8670—Cheques and Bill, 
       102 PAO Cheques,

    or

103 Departmental Cheques, 
as the case may be.

    To

8658—Suspense Accounts 
108 PSB Suspense

                    Cr.

In the case of cheques paid by a branch of Reserve Bank of India, the following accounts adjustments are made by the Pay and Accounts Office by means of a Transfer Entry, on receipt of  the Monthly Statement of Balances from the Central Accounts Section of RBI, Nagpur:-

(--) Cr. 8670—Cheques and Bills 
102 PAO Cheques, 

    or

103 Departmental Cheques, 
as the case may be.

    To

8675—Deposits with Reserve Bank 
101 Central—Civil

                Cr.

2.7     A cheque issued by the Pay and Accounts, Officer or the Cheque Drawing DDO is valid for a period of three months after the month of issue. A cheque dated any day in January of a year is valid for encashment till 30th of April of that year. Therefore, if a Pay and Accounts Officer finds that no payment has been made on a cheque issued by him or a Cheque Drawing DDO under him and the paid cheque has not been received alongwith the Main Scrolls listing daily payments till the end of April, necessary enquiries are made to ensure that the cheque has not been encashed and either the cheque is revalidated or a fresh cheque is issued on request. A time-barred cheque against which a fresh cheque; is not required to be issued, is cancelled by reversing the original transaction as under:-

(-) Cr. 8670—Cheques and Bills
102 PAO Cheques 

        or

103 Departmental Cheques, 
as the case may be.

        To

Functional Major/Minor Head etc. 
(to which the expenditure was originally debited)

                                (-) Dr.

2.8     As stated earlier, the head 'Cheques and Bills' is an intermediary accounting device for initial record of transactions which are eventually to be cleared/withdrawn. Thus, with a view to keeping a watch over the clearance of the balances under the head 'Cheques and Bills', the following record;, have to be maintained by the Pay and Accounts Office.

(a) Register of Cheques Drawn (Form CAM-10)

After a pay order recorded on a bill is signed by the Pay and Accounts Officer, a cheque is drawn for the amount passed for payment as per the pay order. The cheque number, its amount and the date of drawal are noted in this Register under the initials of the Pay and Accounts Officer. At this stage the cheque is not dated. The Pay and Accounts Officer has to sign the cheque after seeing that the amount of the cheque tallies with the pay order approved by him. The Pay and Accounts Officer will cancel the pay order while signing the cheque.

(b) Register of Cheques Delivered (Form CAM-11)

When the cheque is actually delivered/despatched to the party concerned, it is entered in the above Register which contains columns for showing the cheque number, name of the payee, voucher number and the amount of the cheque. The  date of delivery is written or stamped on the cheque. The voucher No. and cheque No. and date are also to be noted on the passed bill which from now on is called a voucher. When the cheque is presented to the accredited branch of the bank for payment, the payment is reported through scrolls along with paid cheques to the Focal Point Branch. The Focal Point Branch of the Public Sector Bank sends daily a Main Scroll which indicates the cheque No. and date and the amount paid alongwith the paid cheques to the Pay and Accounts Office. In the Pay and Accounts Office the number and amount of the paid cheques is tallied with the corresponding entries in the 'Register of Cheques Delivered' and the date of payment is entered in the relevant column in the Register and it is ticked off so as to facilitate the preparation of the list of outstanding cheques at the end of each month.

The 'List of Payments' (Form CAM-21) received from the Cheque Drawing DDO serves the purpose of 'Register of Cheques Delivered' in case of cheques issued by the Cheque Drawing DDO.

(c) PAO's Check Register of Outstanding Pre-check Cheques (Form CAM-15)

A Register in the above form is to be maintained by the Pay and Accounts Officer personally. This Register shows the amount of cheques delivered and the amount of cheques encashed daily during a month. The amount of cheques outstanding as per this Register is compared with the amount of outstanding cheques prepared by the compilation section each month. The compilation section on receipt of the daily payment scrolls together with paid cheques from the bank links the serial number of the cheque in the Register of cheques delivered (CAM-11) after verifying the correctness of the amount as shown in the Scroll and notes the date of payment against the cheque. This is done in respect of all cheques paid during the month. At the end of the month a list of all cheques outstanding is prepared and tallied with the balance as per CAM-15. It is to be ensured that the amount of outstanding cheques tallies with the balance outstanding as per accounts figures. The discrepancy, if any, has to be looked into and rectified.

(d) Register of Public Sector Bank Suspense/Reserve Bank Deposits (Form CAM-17)

The Pay and Accounts Office also posts the total of each day's payments and receipts as per daily Payment/receipt scrolls in this Register. Separate folios are opened for entering scrolls pertaining to the Pay and Accounts Office and each Cheque Drawing DDO. The total for the month in this Register is tallied with the trial of the 'Datewise Monthly Statement of Payment' received after the close of the month from the Focal Point Branch.

2.9     The grand total of the 'Register of Cheques Delivered' during the month is reconciled with the net amount of paid vouchers posted in the compilation sheet and is shown under the head 8670—Cheques and Bills 102-PAO Cheques. Similarly, the grand total of the 'List of Payments' gives the total amount to be booked under the minor head 103-Departmental Cheques and necessary adjustment thereof is made in the accounts so that the balance as per accounts figures agrees with the total of the outstanding cheques as per Register of Cheques Delivered at the end of each month.

To enable the Principal Accounts Office to maintain the Broadsheets of 'PAO Cheques' and 'Departmental Cheques' correctly, each Pay and Accounts Officer is required to submit details of balances outstanding under the head 'PAO Cheques' and 'Departmental Cheques'.