CROSSING OF

CHEQUES
Cheques can be of two types:-

Open Cheque.
Crossed Cheque.
 Kinds of CROSSING
1.General Crossing

2. Special Crossing
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.

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.
If you cross out “to bearer” and draw two
parallel lines across the front of the cheque
(usually the top left corner is sufficient) then you
are telling the bank that the money has to be paid
into an account and cannot be cashed (exchanged
for cash).

This means that the person who eventually

receives the money can be traced because there
will be a record of the deposit.
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.”
 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/Co.’ may be written in

between the lines.
The following do not constitute a crossing
within the meaning of Sec 123
Forms of General Crossing

1.And Company
2. & Co.,
3. Not
Negotiable
4. Payee’s A/C
 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. The main intention of crossing a cheque is to

give protection to it.
 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”
 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.
Significance of Special Crossing

1. It is a direction to the paying banker.

2. A special crossing gives more protection
the cheque than a general crossing.

Not Negotiable Crossing

A/c Payee
Crossing