What is meant by general crossing?

General Crossing: When across the face of a cheque two transverse parallel lines are drawn at the top left corner, along with the words & Co., between the two lines, with or without using the words not negotiable. When a cheque is crossed in this way, it is called a general crossing.

What are the types of crossing of Cheque?

Types of Cross Cheque

• General Crossing. Special or Restricted Crossing (Section 124) In the case of special crossing, the cheque bears the name of the bank, either with or without the words ‘not negotiable’.
• Special Crossing. Not negotiable crossing (Section 130)
• Non- Negotiable Crossing. Amount Payee Crossing.

What is crossing of a cheque Why is it advisable to cross a cheque?

Crossing of cheque means drawing two parallel lines on the left corner of the cheque with or without additional words like “Account Payee Only” or “Not Negotiable”. Crossed cheque cannot be encashed at the bank counter. It is used to directly credit the bank account of the payee, making it a must safer instrument.

How do you open a crossed cheque?

A crossed cheque can only be cashed through a bank of which the payee of the cheque is a customer. There are different modes of crossing a cheque. The simplest mode of crossing is to put two parallel lines across the face of the cheque. This is called General Crossing.

What is the effect of general crossing?

The effect of the general crossing is that any other banker must submit such a cheque to the paying banker. Payment can only be made by bank account and should not be made at the bank’s payment counter. The banker then credits the cheque amount to either the owner of the cheque or the payee ‘s account.

Is cross cheque more safer?

When a cheque is crossed, the holder thereof cannot encash it at the counter of the bank. Encashment at the counter of the bank is possible only in the case of an open cheque, i.e. a bearer cheque or an uncrossed cheque. Thus, a crossed cheque is always safer than a bearer cheque.

Can a crossed cheque be endorsed?

Crossed Cheque– A crossed cheque is the one the proceeds of which can only be deposited into the payee’s account. However, such cheques can be endorsed by the payee to a third party; the next person can further endorse it to someone else.

How do you tell the difference between a cash cheque and a crossed cheque?

For a payee only (non-transferable) cheque: Cross the cheque by drawing two parallel lines across the top left-hand corner of the cheque….For a cash cheque:

1. Don’t cross your cheque.
2. Don’t delete the words “or bearer” on the cheque.
3. Don’t add the words “Account Payee Only” (or “A/C Payee Only”)

Which is the safest form of crossing in cheque?

Explanation: In Account payee crossing the amount will not be paid to anybody over the counter. It will be credited to the account of the payee only. Thus account payee crossing ensures safe transfer of funds.

Who has the right to crossing a cheque?

The Drawer of the Cheque can cross the cheque generally or specially. If it is an open cheque, then the holder can cross the cheque generally or specially. If the cheque is crossed generally, the holder can cross it specially.

Can a crossed cheque be Cancelled?

No, the recipient of the cheque (sometimes called the “payee”) cannot remove a crossing from a cheque nor can the cheque be transferred over to a third party. It cannot be cashed over the counter by the payee; it must be paid into an account in the same name as that appearing in the payee line of the cheque.

What is crossing and endorsement of cheque?

It gives a direction to the paying banker, that paying banker should pay the cheque only to the banker, whose name appears in the crossing or to his agent. • If a cheque specially crossed to a bank is presented by another bank, not in the capacity of its agent, the paying banker is justified in returning the cheque.

What do you mean by crossing of cheque?

According to this section, crossing of a cheque means drawing across the face of a cheque two parallel transverse lines with or without the words, “And Company” or “Not Negotiable” or “Account Payee” between the two transverse parallel lines. In short, to constitute general crossing, the following conditions must be fulfilled:

What happens when a cheque is stolen with a general crossing?

A bearer cheque bearing a general crossing with the words ‘not negotiable’ is stolen. Eventually, it comes into the possession of Aman who takes it in good faith and for value. Subsequently, Aman collects the amount of cheque through his bank. He receives the amount and the paying banker also pays the amount.

What is the difference between General Crossing and restrictive crossing?

When a cheque is crossed in this way, it is called a general crossing. Restrictive Crossing: When in between the two transverse parallel lines, the words ‘A/c payee’ is written across the face of the cheque, then such a crossing is called restrictive crossing or account payee crossing.

What does it mean when a cheque is not negotiable?

The Not Negotiable Crossing does not mean that the cheque is non-transferrable. As per section 130 of the Negotiable Instruments Act, 1881 a person taking a cheque bearing a general or special crossing with the words ‘not negotiable’ will not have and is neither capable of giving a better title than that which the person from whom he took it had.