Crossing of Cheques
Cheques are of two types namely open cheques and crossed cheques. A cheque without crossing is
called an open cheque. Open cheques are payable at the counter of the bank to any person who present
it. Therefore great risk is involved if such cheques fall in the hands of undesirable persons. In order to
avoid such risks and to become the cheque more safe, a device known as crossing is introduced. A
crossing is a direction to the paying banker to pay the amount of the cheque only to a banker and not
directly to a person who presents it at the counter. Crossing of a cheque means drawing across the face
of the cheque two parallel transverse lines with or with out the words “and Company”. Crossing can be
hand-written or stamped.
Objects of Crossing
Crossing of cheques is very essential to minimise the risk involved in open cheques and to ensure its
safety.
1. It is very difficult for a wrong person to receive the payment of a crossed cheque. This is
because; the crossing is a direction to the paying banker not to pay the cheque at the counter,
but to another banker only. Therefore a wrong person finds it difficult to encash the cheque at
the counter. He has to collect the cheque through another bank. The another bank will collect
the cheque only for their customers. Thus crossing ensures the safety of the cheque.
2. It is also very easy to trace the actual person who has received the payment of the cheque in
respect of crossed cheques
Types of crossing
1.General Crossing
Section 123 of the Negotiable Instrument 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 with out the words ‘not
negotiable’, that addition shall be deemed to be a crossing, and the cheque shall be deemed to be
crossed generally”.
2.Special Crossing
Section 124 of the Negotiable Instrument Act 1881 defines a special crossing as follows. “Where a
cheque bears across its face, the addition of the name of a banker, with or with out 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.”
3.Not Negotiable Crossing
The word ‘Not Negotiable’ may be included in general and special crossing. Inclusion of these words in
the crossing has great practical significance. ‘Not Negotiable’ does not mean not transferable. It does
not affect the transferability, but it only takes away the negotiability of the cheque. Negotiability means
transferability by mere delivery and endorsement plus transferability free from defects. The transferee
gets better title than that of the transferor if he takes the cheque in good faith. Thus a cheque crossed
