Different Types of Crossing Cheques
Cheque crossed generally
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 a crossing, and the cheque shall be deemed to be crossed generally.
Cheque crossed specially
Where a cheque bears across its face an addition of the name of a banker, either 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.
Account Payee or Restrictive Crossing
This crossing can be made in both general and special crossing by adding the words Account Payee. In this type of crossing the collecting banker is supposed to credit the amount of the cheque to the account of the payee only. The cheque remains transferable but the liability of the collecting banker is enhanced in case he credits the proceeds of the cheque so crossed to any person other than the payee and the endorsement in favour of the last payee is proved forged.
The collecting banker must act like a blood hound and make proper enquiries as to the title of the last endorsee from the original payee named in the cheque before collecting an ‘Account Payee’ cheque in his account. The same can be done by place slanted parallel line in the top most left corner of the cheque – in writing over their A/C payee’s only.
Not Negotiable Crossing
The words ‘Not Negotiable’ can be added to General as well as Special crossing and a crossing with these words is known as Not Negotiablecrossing. The effect of such a crossing is that it removes the most important characteristic of a negotiable instrument i.e. the transferee of such a crossed cheque cannot get a better title than that of the transferor (cannot become a holder in due course) and cannot convey a better title to his own transferee, though the instrument remains transferable.
The term “Crossing a cheque” refers to the action where the person issuing the cheque makes two diagonal lines on the top left corner of the cheque. This means that this cheque can be paid only into an account and not to a person who wants to encash it to direct cash. The person to whom the cheque is issued, must deposit it into his account if he wants the money. This is a safety feature that would come in handy in case of stolen or lost cheques. We can track who used the cheque using the deposit details.