The drawer is the person or company whose account the cheque is drawn on and who signs it (Section 7, NI Act). The drawee is the bank directed to pay. The payee is the person named on the cheque to receive payment; if the cheque is endorsed on, the current holder may be a "holder in due course". Under Section 138 the payee or holder in due course prosecutes the drawer, and for a company cheque Section 141 extends liability to the persons in charge of the company.
How the roles work in India
When a buyer company pays a supplier by cheque, the company is the drawer (its director or manager signs as authorised signatory), the company's bank is the drawee, and the supplier is the payee. If the supplier endorses the cheque to its own creditor, that creditor becomes the holder. On dishonour, the payee or holder sends notice to the drawer and complains against the drawer; where the drawer is a company, the complaint also names the company and, under Section 141, every person who was in charge of and responsible for its business when the offence was committed, typically the managing director and the signatory.
Why it matters for getting paid
Getting the parties wrong is fatal: a complaint against only the signatory director without the company is not maintainable, and a complaint by someone who is not the payee or holder is dismissed. Suppliers should also insist that cheques are drawn by the actual debtor, not by a third party, because a cheque from a sister concern makes the Section 139 presumption harder to use. See Section 141 company liability and Section 138.
How FundRaksha uses it
FundRaksha's advocates verify the drawer from the cheque, the bank account name and the company's MCA master data before drafting the notice, so that the company and the responsible officers are correctly named from day one. This care is part of why FundRaksha's Section 138 matters proceed without technical objections; fee 30% on recovery, dedicated advocate within 24 hours.
Worked example (hypothetical)
ABC Traders (a partnership in Indore) supplies ₹4,00,000 of goods to XYZ Pvt Ltd (Bhopal), which pays by a cheque signed by its director Mr R. The cheque bounces. Drawer: XYZ Pvt Ltd; drawee: XYZ's bank; payee: ABC Traders. The notice goes to XYZ Pvt Ltd at its registered office, to Mr R as signatory, and to the managing director as the person in charge. If ₹4,00,000 is unpaid after 15 days, the complaint names XYZ Pvt Ltd as accused no. 1 and the two individuals as accused nos. 2 and 3, and asks for 20% interim compensation (₹80,000) under Section 143A.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.