DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : P. Samba Murthy,
Designation : Head of Department

Branch : D.C.C.P.
Institute : S.R.R.S. Govt. Polytechnic,Sircilla,
Karimnagar District
Year/Semester : V Semester
Subject : Banking – I
Subject Code : CCP- 504(B)
Topic : Negotiable Instrument Act
Duration : 50 Minutes
Sub-Topic : Various types of crossing of cheques
CCP504(B).62 1
Teaching Aids : PPT
Objectives

On completion of this period, you would be

able to :
 Explain the special crossing of cheques.

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RECAP

 So far we have learnt about the importance of

crossing of cheques particularly with regard to
the general crossing and with specimens.
 Now let us discuss on some more types
crossing of cheques in this session.

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Know to Unknown

1.What is general crossing?

2.Why it made?

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 Special Crossing:

• Where a cheque bears across its face an addition

of the name of the banker, either with or without
the words “Not negotiable’ according to sec. 124
of Negotiable Instruments Act, the cheque is
deemed to be crossed specially.

• The special crossing denotes that the amount is

payable by the drawer only to the bank named in
the crossing.

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The specimen forms of special
crossing are shown below

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Special Crossing

 The special crossing on the cheque is a direction to

the paying banker to honour the cheque only when
it is presented through the bank mentioned in the
crossing and no other bank.

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Special Crossing

 The cheque crossed specially is safer than the

generally crossed cheque.
 The banker to whom a cheque is crossed
specially may appoint another banker as his
agent for the collection of such cheque.

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Restrictive or ‘Account Payee’ Crossing:

 Besides the above two types of statutory crossing,

in recent years the practice of crossing cheques with
the words “account payee” or “account payee only”
has sprung up. Such a crossing is termed as
‘restrictive crossing

CCP504(B).62 9
Restrictive or ‘Account Payee’ Crossing:

 Cheque crossed either generally or specially

may be made payable to the account of a
particular person.
 This is known as ‘Account Payee’ crossing.
 It should clearly be noted that it is direction to
the collecting banker as to how the money is to
be dealt with but not to the paying banker

CCP504(B).62 10
Restrictive or ‘Account Payee’ Crossing:

 ‘Account Payee’ crossing is made with a view to

minimizing the chance of fraud and ensuring
that the cheque is collected for the named
payee and not for anyone else.
 The fact that a cheque is payable to bearer and
crossed ‘account payee’ does not minimize the
significance of the term.
 Account payee crossing is also known as
restrictive crossing
CCP504(B).62 11
Double Crossing:

 A cheque bearing a special crossing is to be

collected through the banker specified therein and
it cannot be crossed specially again to another
banker, i.e. a cheque cannot have two special
crossing.
 If it is allowed, the second special crossing
frustrates the first one.

CCP504(B).62 12
Double Crossing:

 However, there is one exception to this rule for a

specific purpose.
 If the banker, to whom a cheque is specially
crossed, does not have a branch at the place of
the paying banker, or if he, otherwise, feels the
necessity he may cross the cheque specially to
another banker.

CCP504(B).62 13
Double Crossing:

 The other banker acts as his agent for the

purpose of collection of the cheques.
 In such case, the latter crossing must specify that
the banker to whom it has been specially crossed
again shall act as the agent of the first banker for
the purpose of collection of the cheque.

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For example, such double crossing
appears as follows
__________________________
Punjab National Bank
to
Andhra Bank
as agent for collection
____________________________

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Double Crossing:

 It is essential that the words “as agent for

collection” must be included in the special
crossing.
 It is laid down in Sec.127 that when the second
special crossing to a bank is not done as agent
for collection, the payee banker must refuse the
payment of cheque.

CCP504(B).62 16
Double Crossing:

 In short, the payee banker is under an obligation

to dishonour the cheque crossed specially to
more than one banker except when the second
crossing is to an agent for the purpose of
collection.

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Obliterating a Crossing:

 Sometimes the crossing on cheque is

obliterated or erased by a dishonest person so
cleverly that the paying banker is unable,
despite utmost effort on his part, to detect such
obliteration and pays the cheque as an open
cheque.
 Sec.89 provides protection to the paying banker
and he is discharged from his liability and he
can debit the amount of the cheque to the
drawer’s account under the following conditions:
CCP504(B).62 18
Double Crossing:

 The cheque does not appear to be crossed

cheque at the time of presentation of the
obliteration of the crossing is not apparent and
 The payment is made according to the apparent
tenor of the cheque and in due course.

CCP504(B).62 19
Quiz

Special crossing contains which of the

following words
b) Not negotiable
c) Account payee
d) Both And B
e) None

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Quiz

Account payee crossing is also called

b) Restrictive crossing
c) General Crossing
d) Transfer
e) None

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SUMMARY

 In special crossing the payment can be collected

only through the particular banker whose name
appears between the two parallel transverse
lines.
 Restrictive crossing is a direction to the collecting
banker that the proceeds of the cheque are to be
credited only to the account of payee named in
the cheque.

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SUMMARY

 In double crossing, the collecting banker

may further cross it especially to another
bank for creating an agency for the
collection of the cheque.

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Frequently Asked Questions

 Explain ‘special crossing’. How does it differ

from general and not negotiable crossing?
 Explain various kinds of crossing of cheques
giving their specimens.
 Define Double Crossing.
 Who can cross a cheque

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Assignment
Prepare answers for the above questions

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