Crossing of Cheque - Negotiable instruments Act(1881), Business Law Video Lecture | Business Law - B Com

in this session we are going to
understand about the crossing of cheque
and different kinds of crossing so what
is crossing of check this is nothing but
drawing two parallel lines on the face
of the cheque so by crossing you are
giving an instruction to the banker not
to pay the check across the counter of
the bank you are directing to pay the
money one lead through the bank or to
the credit of the account of the
customer so by crossing you are creating
what is known as cross check by not
crossing you are creating what is known
as open check so check can be divided
into two categories open check and cross
check so in open check you have two
categories called better check and order
check
whereas in cross check you have two
categories called general crossing and
special crossing we will see what is
open check open check is something which
is payable across the counter of the
bank it can be encouraged at the counter
of the bank so there are two types of
open checks one is bearer cheque the
other one is order check so what is
bearer cheque this is a cheque which is
payable to a named person in the cheque
or the bearer who is bringing that check
say for example if a cheque is mentioned
as pay mr. X or barrel it means it can
be paid to mr. X across the counter or
it can be paid to the bearer or anyone
who is bringing that cheque so the
second type of open cheque is order
check order cheque is something which is
payable to the person named in the
cheque or his order say for example it
is mentioned as mr. X mr. X is not
bringing the cheque whereas he ordered
somebody else to bring the cheque and
his name is mentioned so it can be paid
to him so this is about open check next
we'll move on to the cross check because
in cross check there are two types we
have seen one is general crossing the
other one is special crossing so let's
see what is general crossing when I
check bars across its face and addition
of words like an company or an Co
or any abbreviation of that between
these two parallel lines or two parallel
transverse lines with or without words
like not negotiable then that edition
will be construed as general crossing so
there are various forms of general
crossing one you have seen or you are
seeing it on the screen the second kind
of general crossing is this I mean that
gentle crossing can carry the word not
negotiable it may be with or without it
may be with account pay or without or
convey but if you draw these two lines
and if you mention the name then it's
going to be the gentle crossing so what
is the significance of general crossing
when a check is cross generally the
banker should not pay the amount of
cross the counter the banker is directed
to make the payment through a banker the
receiver of the receiver of amount of
the check can easily be traced in case
the check is lost or stolen and
collected so Crossing is going to assure
you safety so this is about general
crossing let's see what a special
crossing so what is special crossing
when the name of the banker is written
on the face of the cheque it is called a
special crossing so when a cheque bass
across its face and addition of the name
of the banker with or without words like
not negotiable that addition shall be
deemed to be crossed especially and to
be crossed to that backer so the point
to be noted here is that in special
crossing two parallel transfer lines are
not necessary so there are various forms
of special crossing you are seeing one
or the other on the screen so what is
the significance of special crossing in
special crossing the paying banker
should pay the amount only to the banker
whose name is stated on the face of the
cheque or to its agent for collection
this method of crossing is considered as
very safe crossing when words like not
negotiable
or not negotiable crossing or added to
the general crossing or special crossing
the check loses its negotiability the
transferee of such a check cannot secure
a better title than that of the
transferor even if he takes it in good
faith and condition so if the transferor
has a defective title then the
transferring also gets the same
defective title to the check it is like
a stolen pen the receiver of which who
does not know that it is a stolen pen
still the receiver would be considered
like a thief so this is about not
negotiable Crossing significance in
special crossing then you also have what
is known as account pay crossing if you
add the words like account payee or
account payee only or pays account only
to the general or special crossing it
gives direction to the collecting banker
to collect the cheque and credit the
proceeds to the account of the pay you
only this crossing is called restrictive
crossing or account payee crossing so
even if a cheque is stolen or lost it is
difficult for anyone to collect the
cheque the reason is that banker will
not collect the cheque unless customer
has an account with it