Page 166 - DCOM208_BANKING_THEORY_AND_PRACTICE

Unit 10: Negotiable Instruments

Special or Restrictive Crossing: Section 124 of the Act refers to Special crossing as: Notes
“Where a cheque bears across its face in addition to the name of the banker either with or
without the words or the words ‘not negotiable, then the cheque is said to have been crossed
specially. The object of special crossing is to direct the banker to pay the cheque only if it is
presented through the particular bank mentioned.”

When a particular bank’s name is written in between the two parallel lines the cheque is said to
be specially crossed.

Figure 10.3: Specimen of Special Crossing

Source: http://kalyan-city.blogspot.com/
In addition to the word bank, the words “A/c. Payee Only”, “Not Negotiable” may also be
written. The payment of such cheque is not made unless the bank named in crossing is presenting
the cheque. The effect of special crossing is that the bank makes payment only to the banker
whose name is written in the crossing. Specially crossed cheques are safer than generally crossed
cheques.

General Crossing Special Crossing
1. Drawing of two parallel transverse 1. Drawing of two parallel transverse lines is not
lines is a must. essential.
2. Inclusion of the name of a banker is 2. Inclusion of the name of a banker is essential.
not essential.
3. In General Crossing paying banker 3. In Special Crossing paying banker honours the
honours the cheque from any bank cheque only when it is presented through the
A/C. bank specified in the crossing and no other
bank.
4. General Crossing can be converted 4. Special Crossing can never be converted to
into a Special Crossing. General Crossing.
5. In case of General Crossing the words 5. In case of Special Crossing the name of a banker
“And Company” or “& Company” or may be written within two parallel transverse
“Not Negotiable” between the lines or with the words “And Company” or
transverse lines to highlight the “Account Payee Only” or “Not Negotiable” the
crossing does not carry special inclusion of these words has become
significance. customary.

Double Crossing: A cheque is said to be doubly crossed when it bears 2 separate special crossings.
As per section-127, “where a cheque is crossed specially to more than one banker except when
crossed to an agent for the purpose of collection, the banker on whom it is drawn shall refuse
payment thereof.” Thus a paying banker shall pay a doubly crossed cheque only when the
second banker is acting just as the agent of the first collecting banker and this has been clearly
mentioned on the instrument.

LOVELY PROFESSIONAL UNIVERSITY 161