A cheque is a negotiable instrument, as we all know. Any informed person is aware that a cheque could be stolen, lost, or have a forged signature of the payee during the circulation process. This type of situation might lead to the misuse of a cheque.

As a result, crossing cheques is a common method of protecting both the drawer and the payee. It is possible to cross both the bearer and order cheques. As a result, crossing cheques reduces fraud and incorrect payments.

Definition of Crossing of Cheques

Any cheque can be crossed by drawing two parallel lines across it. Crossing a cheque entails drawing two parallel transverse lines across it, with or without words in between.

The crossing of a cheque instructs the drawee bank not to pay the specified amount at the counter, but rather to make the payment through a bank. Because a crossed cheque may only be put directly into a bank account and cannot be cashed immediately, it protects payment from fraud by unscrupulous individuals.

Importance of Crossing of Cheque

The significance of crossing a cheque is that it can only be collected from the drawee bank in the bank account and cannot be encashed by the bearer. (Negotiable Instruments Act, Sections 123 and 126) As a result, the issuer of the cheque is protected and safeguarded by the crossing of the cheque. In contrast to a non-crossed cheque, a crossed cheque makes it easy to determine who cashed the check. As a result, Crossing safeguards both the payer and the payee of the check. Bearer and order cheques can also be crossed.

Rules of Crossing of Cheque

The rules for crossing of cheques given as follows:

• A cheque can be crossed in any way, or the holder can cross it in a certain way.
• The holder of the cheque has the option of adding the words “not negotiable” to it.
• When a person sends an uncrossed or crossed cheque to a banker for collection, he or she may cross it specifically to themselves. In this situation, he is not protected under the law from being sued for conversion.

Types of Crossing of Cheque

The two types of crossing of cheque  are general and special crossing of cheque are General and Special crossing of cheque.

General Crossing of Cheque

“If a cheque has a cross, its suffers an addition of the words ‘And Company’ or any abbreviation thereof, between two parallel transverse lines, or of two parallel transverse lines simply, and either with or without the words ‘not negotiable,’ that addition shall be deemed to be a crossing of cheque, and the cheque shall be deemed to be crossed generally,” as per the Section 123 of the Negotiable Instruments Act. Two parallel transverse lines are drawn across the face of the check, with or without the words “not negotiable” inscribed on it. A crossing will be considered if such an addition is made.

To summarise, a check is regarded crossed in the following situations:

• When there are transverse parallel lines marked across the face of cheque
• When the cheque bears an acronym “& Co.” between the two transverse parallel lines
• When the cheque has the phrase  “Not Negotiable” written along the two parallel lines
• When the cheque pertains to the phrase “A/c. Payee” between the transverse parallel lines.

Special Crossing of Cheque

When the name of a specific bank is put between the two transverse parallel lines on a check. Cheque crossing is a unique and restricted process. The cheque that “bears across its face an addition of the name of a banker, with or without the words “not negotiable,” that addition shall be constituted a crossing, and the cheque shall be deemed to be crossed particularly and to that banker,” according to Section 124 of the Negotiable Instruments Act. The amount written in a special crossed cheque is solely payable by the drawee, and only to the bank named in the crossing. 

Merits of Crossing of Cheques

• A cheque drawer has the option of crossing it generically or specifically if he so wishes.
• If the drawer writes an open check. Any holder of it has the ability to cross it in general, change a general crossing into a special crossing, or add the phrases “Not Negotiable” to a general crossing.
• When a cheque is crossed specifically to another banker for collection, the banker to whom it is crossed may cross it again specifically to another banker for collection.
• When a banker receives an uncrossed or crossed cheque for collection, he may cross it specifically to himself.

Conclusion

Crossing if cheque enables a drawer to cross the cheque genetically. Moreover, the drawer has the independence to shift from general crossing to special crossing. A banker also has the right to cross an uncrossed cheque. This article has sufficiently provided information regarding the crossing of cheque, their types as well as their merits.