Section 47 in The Central Government Account (Receipts and Payments) Rules, 1983
47. Procedure for cancellation of a cheque.
(1)When it is necessary to cancel a cheque, (i) in cases where the cheque is not issued, its cancellation should be recorded with dated signature on the counterfoil and the cheque should be destroyed;(ii)where it is issued and withdrawn, after similar Note on its counterfoil, it should be defaced; and forwarded to the Pay and Accounts Office where the drawer is a cheque-drawing D.D.O.;entries in the accounts should be suitably reversed;(iii)if the cheque is not in the drawer's possession after satisfying himself with reference to his records (namely payment and error scrolls and register of cheques delivered) that it is not paid, he should promptly send an intimation by registered post (acknowledgement due) to the branch bank on which it is drawn to stop payment of the cheque. In case the drawer is a cheque drawing D.D.O., he should inform the Pay and Accounts Office. If the currency of the cheque has not expired at the time of sending the intimation, the bank shall acknowledge in writing in the form indicated in clause (i) of sub-rule (2) of rule 48 that it has kept a Note of the 'stop payment' order.(2)A cheque remaining unpaid for any cause, six months after the month of its issue and not surrendered for renewal should be cancelled in the manner indicated in clause (iii) of sub-rule (1) with the difference that no acknowledgement of the stop order may be insisted from the bank. Its amount should also be written back in the accounts.Note. - Fan-fold cheques used in the Defence Accounts Department and cheque forms in continuous lengths permitted to be used by certain offices under the provisions of sub-rule (3) of rule 38 have no counterfoil. The cancellation of such cheques, should, therefore, be recorded by the drawing office on the copy of the schedule of cheques issued and the register of bill payments, as the case may be.
