WHAT IS CHEQUE CROSSING?
Cheque crossing refers to an instruction to the paying banker to pay the amount of the cheque through a banker only and not to the person presenting it at the counter of bank. When simply two parallel transverse lines either with or without any words appearing on the face of a cheque, that cheque is called a crossed cheque.
It is a safer way of transferring money as compared to open cheques & it also helps in preventing fraud & wrong payments.
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GENERAL CROSSING OF CHEQUE
As per section 123 of the Negotiable Instruments Act,
“Where a cheque bears across its face two traverse lines with or without the words or the words ‘not negotiable, the cheque is said to have been crossed generally. Where a cheque is crossed generally, the banker shall not pay it, otherwise than to the banker”.
A generally crossed cheque may have any of the following features:-
- Two transverse parallel lines.
- Two transverse parallel lines with the word “And Company” or “And Co”.
- Two transverse parallel lines with any abbreviation of the word “& Company”.
- Two transverse parallel lines with the words “Not Negotiable”.
- Two transverse parallel lines with the words “Account Payee Only”.
A crossed cheque can be made bearer cheque by cancelling the crossing and writing that the crossing is cancelled and affixing the full signature of the drawer.
SPECIAL CROSSING OF CHEQUE
As per section 124 of the Act,
“Where a cheque bears across its face in addition to the name of the banker either with or without the words or the words ‘not negotiable, then the cheque is said to have been crossed specially.”
In this cheque, the particular bank’s name is written between the two parallel lines & the payment of such cheque is not made unless the bank named in crossing is presenting the cheque.
FEATURES OF SPECIAL CROSSING –
- Two parallel crosswise lines are not necessary for a special crossing.
- The name of the banker must be necessarily specified across the face of the cheque
- It must appear on the left-hand side of the cheque.
- Where a cheque is crossed specially, the banker to whom it is crossed may again cross it, especially to another banker, his agent, for collection.
However, as compared to Generally crossed cheques, especially crossed cheques are considered safer.