What is the significance of crossing a cheque?

Crossing of cheques has been discussed in Negotiable Instruments Act 1881 Section 123-131. Crossing provides an additional security. Crossing means that sum of that cheque can only recovered from a specified banker and it will be credited to the holders account. The crossed cheques are not paid at the counter. Crossing is applicable in case of cheques only and not in case of Bill of Exchange or promissory notes. Crossing may be General crossing or Special crossing. General crossing (NI Act Section 123) is where a cheque bears two parallel lines with words such as a/c payee etc. In Special crossing (NI Act Section 124) the cheque bears the name of the banker also. Section 126 directs that such cheques shall be paid to the banker to whom it is crossed specially or to his agent for collection.
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  • deepak

    General crossing implies payment shall be made to a banker. A/c payee crossing is merely done as a matter of practice and is not defined anywhere in N.I Act