Section 123 in The Negotiable Instruments Act, 1881

123. 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.
124. 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.
130. Cheque bearing “not negotiable”.—
A person taking a cheque crossed generally or specially, bearing in either case the words “not
negotiable”, shall not have and shall not be capable of giving, a better title to the cheque than
that which the person from whom he took it had.
CROSSING OF CHEQUE:
A cross cheque is a negotiable instrument that specifies a general instruction for a checque
that has not yet been deposited into a bank account.
Types of Cheque Crossing - Introduction
A cheque could be an instrument. It will either be open or crossed. An open cheque is that of
the bearer cheque. It’s collectible over the counter on a presentation by the receiver to the
paying banker. A crossed cheque is a type of cheque that cannot be encashed directly over
the bank counter. Instead, the payment is only credited to the payee’s bank account. This
provides an additional layer of security, ensuring that only the intended recipient receives the
funds. Varieties of cheque crossing are General Crossing, Special Crossing, and Restrictive
Crossing.
A standard instruction is for the cheque to be deposited into an account with a bank and to not
be like a shot paid by the holder over the bank counter. The format and verbiage vary
between countries, however, usually, 2 parallel lines could also be placed either vertically
across the cheque or on the highest corner of the cheque. By victimization of crossed
cheques, cheque writers will effectively shield the instrument from being taken or paid by
unauthorized persons. 2 parallel crosswise lines, with or with none word, are usually drawn
on the highest left-hand corner of the cheque.
Crossing a Cheque
 The crossing of the cheque is an instruction to the paying banker to pay the amount to
a specific person. The crossing of the cheque secures the payment by the banker.
 Since a crossed cheque must be deposited into a bank account, the bank records the
transaction, linking it to the recipient’s account details. This makes it easier to track
 who received the payment. The addition of the words ‘Not negotiable’ or ‘Account
receiver only’ is critical to restrain the negotiability of the cheque.
Types of Cheque Crossing
 General Crossing – cheque bears across its face an addition of 2 parallel crosswise
lines.
 Special Crossing – It bears the crossing across its face in which the banker’s name is
included
 Restrictive Crossing – It directs the assembling banker that he has to credit the
number of cheques solely to the account of the receiver.
 Non-Negotiable Crossing – it's once the words ‘Not Negotiable’ are written between
the 2 parallel crosswise lines.

General Crossing (Section 123)

As mentioned earlier, the general crossing of cheques means including some words in
between the two lines drawn which symbolizes a crossed cheque. In general crossing, simply
two parallel transverse lines at the left hand side of its top corner with or without words such
as 'and company' or 'not negotiable' may be drawn. This depicts that the bank on which it is
drawn shall not permit the amount of payment in any other banks. Hence, the payment can be
made only in the collecting bank.

 In general crossing, the cheque bears across its face an addition of two parallel
transverse lines and/or the addition of words ‘and Co.’ or ‘not negotiable’ between
them.
 In the case of general crossing on the cheque, the paying banker will pay money to
any banker. For the purpose of general crossing two transverse parallel lines at the
corner of the cheque are necessary.
 Thus, in this case, the holder of the cheque or the payee will receive the payment only
through a bank account and not over the counter. The words ‘and Co.’ have no
significance as such.
 But, the words ‘not negotiable’ are significant as they restrict the negotiability and
thus, in the case of transfer, the transferee will not give a title better than that of a
transferor.

Special or Restricted Crossing (Section 124)

 In special crossing, the cheque bears across its face an addition of the banker’s name,
with or without the words ‘not negotiable’.
  In this case, the paying banker will pay the amount of cheque only to the banker
whose name appears in the crossing or to his collecting agent.
 Thus, the paying banker will honor the cheque only when it is ordered through the
bank mentioned in the crossing or its agent bank.
 However, in special crossing two parallel transverse lines are not essential but the
name of the banker is most important.

Not negotiable crossing (Section 130)

This type of cheque crossing means that the cheque can be transferred but cannot be
negotiated. In such cases, the ‘cheque holder’ will bear the title of a transferor only.

 It is when the words ‘Not Negotiable’ are written between the two parallel transverse
lines across the face of the cheque in the case of general crossing or in the case of
special crossing along with the name of a banker.
 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.
 One of the important features of a negotiable instrument is that a person who receives
it in good faith, without negligence, for value, before maturity and without knowing
the defect in the title of the transferor, gets a good title to the instrument.
 Thus, he becomes the holder in due course and acquires an indisputable title to it.
Also, when the instrument passes through a holder in due course, all the subsequent
holders also receive a good title.
 But, Not Negotiable Crossing takes away this important feature. In this case, the
transferee does not get the rights of the holder in due course.
 Only if the title of the transferor is good, the title of the transferee is also good. Hence,
in case of any taint in the title of any one of the endorsers, the title of all the
subsequent transferees also becomes tainted.

Amount Payee Crossing

The above term depicts that the amount cannot be paid in any other bank account apart from
the one mentioned in the cheque. Practicing Account payee crossing also ensures that, the
money is transferred to the bank account only and is not given in the form of liquid cash.
This type of cheque crossing indicates that the amount cannot be paid into any bank account
other than the one specified on the check. This type of crossing assures that the funds are only
moved to a bank account and not supplied in the form of cash.
Account Payee Crossing NOTE: In certain payments such as treasury payments and Income
Tax refund orders there prevails a requirement of acknowledging for the receipt of the
amount and the necessary stamp is also required behind the refund order. Whereas, in the case
of Crossing Cheque, no official stamp registered under the Stamp Act is required.

Cheque Validity
The validity of a cheque is estimated to be within a period of three months from the date on
which it is drawn. After this period, it becomes stale, and it may result in the drawee bank
refusing to pay the amount. However, if the cheque has become obsolete due to the expiry of
the period of validity, then it can be re-validated by the drawer.

Restrictive Cheque Crossing

 This type of crossing restricts the negotiability of the cheque. It directs the assembling
banker to credit the amount of money in a cheque to the account of the receiver.
Where the assembling banker credits the return of a cheque bearing such crossing to
the other account, he shall be guilty of negligence. Also, he won't be eligible for the
protection of the assembling banker below section 131 of the Act. However, such
crossings can don't have any impact on the paying banker. This is often therefore as a
result of it's not his duty to see that the cheque is collected for the account of the
receiver.
Why Cross Cheque?
 Crossing a Cheque offers a financial planning framework with explicit instructions on
how to handle monies.
 Furthermore, cross cheques are often identified by drawing two parallel intersecting
lines. It can be found either vertically across the cheque or in the upper left-hand
corner.
 Within the lines, two or more statements such as 'and company' or 'not negotiable'
may be fixed. Furthermore, just painting the lines without any text would not change
the function of the crossing check.
 Furthermore, using Cross cheques, the amount transfer may be preserved by the
cheque representatives. It might also be as a result of being sketched or photographed
by an unauthorized individual.
 This cross-cheque composition, as well as its format and observations, may vary by
country.
 As a result, cross cheques may only be paid through a bank account. The transaction
record of the receiver can be found afterward for further questions and clarifications.