CROSSING OF CHEQUES

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 Topics to be covered

 Introduction of Crossing Cheques

 Essentials of General Crossing

 Essentials of Special Crossing

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What is “CROSSING” a Cheque?

“Crossing” a cheque is a way of making even more certain that the

money is paid to the correct person and not to someone else. By
“crossing” the cheque in the ways that follow, you give the bank
extra instructions about how it is to be paid. This is called limiting
its negotiability.

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• If you draw a line to cross out the words “or bearer”, then you
are telling the bank that the money cannot just be paid out to
anyone who happens to present the cheque. It must be paid out
to the person named on the “Pay” line.

• It is possible to get around this by

“endorsing” the cheque. This means that the person to whom
the cheque is made out signs the back thus giving their
permission for it to be presented for payment.

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Definition of General Crossing

• Sec 123 of the Negotiable Instruments Act 1881 defines

general crossing as follows:

“Where a cheque bears across its face, an addition of the words;

„and company‟ or any abbreviation thereof. Between two
parallel transverse lines or of two parallel transverse lines
simply, either with or without the words „not negotiable‟, that
addition shall be deemed to be a „crossing, and the cheque
shall be deemed to be crossed generally.”

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Essentials of General Crossing
1. Two lines are of paramount importance in
crossing.

2. The lines must be drawn parallel and transverse. It

means that they should be arranged in a crosswise
direction. They should not be straight lines.

3. The lines are generally drawn on the left hand side .

4. The words „not negotiable‟ may be added to a

crossing.

5. The words „and Company‟ may be written in

between the lines.

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The following do not constitute a
crossing within the meaning of Sec 123

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Significance of General Crossing

1. The effect of general crossing is that it gives a direction

to the paying banker.
2. The direction is that the paying banker should not pay
the cheque at the counter.
3. If a crossed cheque is paid at the counter in contravention
of the crossing:

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a. He has no right to debit his customers
account, since , it will constitute a breach of his customer‟s
mandate,
b. He will be liable to the drawer for any loss, which he
may suffer,

c. He will be liable to the true owner of the cheque who may

be the third party.

4. The main intention of crossing a cheque is to give

protection to it.

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SPECIAL CROSSING
Sec 124 of the Negotiable Instruments Act of 1881
defines

“where a cheque bears across its face, an addition of

the name of a banker, with or without the words
„Not Negotiable‟, that addition shall be deemed a
crossing, and the cheque shall be deemed to be
crossed specially, and to be crossed to that banker”

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Essentials of Special Crossing
1. Two parallel transverse lines are not at all essential
for a special crossing.

2. The name of a banker must be necessarily specified

across the face of the cheque. The name of the banker
itself constitutes special crossing.

3. It must appear on the left hand side, preferably

on the corner.

4. The two parallel transverse lines and the words „not

negotiable be adedd to a special crossing.

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Summary

A cheque is said to be crossed when two transverse parallel lines with or without any
words are drawn across its face. A crossing is a direction to the paying banker to pay
the money generally to the banker or a particular banker as the case may be and not to
the holder at the counter.

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