As a common man, we often prepare cheque and mark it as account payee. Sometime we just cross it with parallel lines. Many of us don’t know the about the various types of crossing of cheque as per negotiable instrument Act, 1881. They are General crossing, Special Crossing, Not negotiable crossing and account payee crossing. Cheque is negotiable instrument, the property (ownership ) in which is acquired by anyone who takes it bonafide and for value, notwithstanding any defect in the title of any prior party. Download here all information.
Crossing a cheque means direction given by the drawer (maker) of the cheque to the drawee bank, not to pay the cheque at the counter of the bank, but to pay it to a person who presents it through a banker. The purpose of crossing is to make possible to trace the person to whom the payment has been made. Thus, it make the cheque safe.
So let us discuss the various crossing tools to safeguard a cheque in India.
- GENERAL CROSSING
In this type of crossing the cheque must contain two parallel transverse lines. They could be put any where on the cheque. Generally we put it on top left of the cheque. The effect of this crossing is that the cheque must be paid only to the banker.
- SPECIAL CROSSING
The cheque must contain the name of the banker. It may be made only once. The effect of this crossing is that the cheque must be paid only to the banker to whom it is crossed. Please note that special crossing can not be converted into general crossing.
- NOT NEGOTIABLE CROSSING
In this type of crossing, the cheque must contain the words ‘not negotiable’. The cheque must be crossed generally or specially. The effect of this crossing is that the cheque nevertheless remains negotiable (transferrable) and the title of the transferre shall not be better than title of transferor.
- ACCOUNT PAYEE CROSSING
This is also called restrictive crossing. The cheque must contain the words ‘account payee’ or ‘account payee only’. The cheque must be crossed generally or specially. The effect of this type of crossing is that the cheque does not remain negotiable anymore.
So safeguard your cheque adequately, next time when you make it and use the types of crossing of cheque.
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I want to transfer my account (amount) from one bank to another. I am in abroad ,to make it safe transferring how to write the cheque so that no one can cash and it transfer safely to my other bank account .
Hi,
Make a cheque from your existing bank account in favor of new bank account. The cheque will be in your name only and it should be ACCOUNT PAYEE CROSSING as reflected in above article. You can also put magic tape over the amount in number in cheque for more safety.
Sir i want to endorse a check that is under my name with two vertical lines nothing like AC payee or not negotiable in between the two lines i want to transfer it to my father account. Can i do it.
Mr. Silva, the payee of a bill of exchange, endorses in blank and delivers it to Mr. Raja. Mr. Raja presents the bill for payment. But the acceptor dishonors it. Advise Mr. Silva on his liabilities on the bill.
What does this line mean, – “the title of the transferre shall not be better than title of transferor.”??????