You are currently viewing Types of Crossed Cheque & Validity

Types of Crossed Cheque & Validity


Types of Crossed Cheque & Validity

A cheque is one of the most frequently used types of negotiable instruments. You’ll need a bank account, either savings or a current account, to write a cheque in your own name or in the name of someone else, instructing the bank to pay the specified amount to the person mentioned on the cheque. This transaction must be handled with extreme caution since it might result in major banking fraud.

A cheque is a document that guarantees the payment of a certain amount of money to a specific person or to the holder of the instrument on demand. It’s a printed form that you may use to make bank account payments. When you write a cheque, you fill in the amount of money you want to send to the person you’re paying, sign it, and deliver it over to the person you’re paying. Your bank transfers the funds from your account to that person (payee).

It’s one of the safest and easiest ways to pay, and it’s done through simple delivery.

One of the advantages of using a cheque is that you may easily transmit a high-value transaction, which would be difficult to do with real cash. The following are some of the crucial details that should be included in a cheque:

  • It is necessary to date a cheque.
  • The amount of money should be written in both figures and words on a cheque.
  • The person issuing the cheque (Drawer) must sign the cheque.
  • A cheque must be drawn from a certain bank (Drawee).
  • A cheque must include the name of the cheque’s receiver (Payee).

Meaning of Crossed Cheque

In India, a cheque is a component of the functioning financial system, making it a useful instrument for sending and receiving money without the need for real currency transfers. What is the value of a cheque? A cheque, in simple words, is a valuable document that may be used by an individual, company, or government to transact a variety of money values.

It is necessary for the issuer to keep an account, either savings or a current account, at a bank branch in order to make a successful cheque transfer. This guarantees a smooth fund transfer process. Despite the fact that electronic forms of cash transfer have become increasingly popular in recent years, a cheque transaction is still seen as a safe way to trade money with businesses throughout the country.

What is a Crossed Cheque?

Crossed cheques are often used in Mexico, Australia, and a number of European and Asian nations to give explicit instructions to a financial institution about how the cash should be handled. Crossed cheques are most typically used to guarantee that money is deposited into an actual bank account.

Such receiving banks are prohibited from cashing such cheques as soon as they are received. Because the cash must be handled through a collection banker, this gives a measure of protection to the payer. While the exact format varies by country, two parallel lines are the most commonly used symbols. The phrases “& Co.” or “not negotiable” are occasionally used with these sentences. In some situations, the word “account payee” may be placed on the cheque as a substitute for the aforementioned cashing instructions.

Crossed Cheques Vs. Uncrossing Cheques

It is difficult for the payee to uncross a cheque after it has been crossed. In addition, crossed cheques cannot be transferred to another, which means they cannot be signed off basically to a third party. The payee’s only option is to make a deposit of the cheque into an account that is opened in their own name.

Although the payee cannot uncross cheques, the payer can do so by writing “Crossing Cancelled” across the face of the cheque, although this is typically discouraged because it removes the protection that the payer put in place in the first place.

Types of Crossed Cheques

Cheques can be crossed in one of two ways, according to the regulations of the Negotiable Instruments Act of 1881 and practical banking operations:

  1. General Crossing

A general crossing cheque is a form of a cheque that contains two parallel transverse lines across the cheque or on the top left corner of the cheque with/without the words ‘and Co.’ or ‘not negotiable’ between them, according to Section 123 of the Negotiable Instruments Act, 1881.


As previously stated, a cheque is usually crossed to instruct the paying banker to pay the specified amount only to a banker and not in cash. It’s vital to draw two transverse parallel lines when crossing a cheque. Although the absence of the phrases ‘and Co.’ and ‘not negotiable’ between the parallel lines does not render the cheque uncrossed, adding the terms ‘non-negotiable’ limits the cheque’s future negotiability.

  1. Special Crossing

A special crossing cheque is a sort of cheque that has the banker’s name across it, with or without the phrase ‘not negotiable,’ according to Section 124 of Negotiable Instruments Act, 1881.


A unique crossing of cheques, unlike a normal crossing, does not necessitate the creation of two parallel lines. However, it is critical to provide the banker’s name. A cheque is crossed in such a way that it only pays the amount of the cheque to the banker whose name appears in the crossing or to his collection agent (if any). When a cheque is ordered through the bank/agent of the bank that is specified in the crossing, a banker will honour it.

  1. Non-Negotiable Crossing

Suppose the words ‘not-negotiable’ are added to any cheque, particularly a cheque that is usually crossed. In that case, the cheque becomes a non-negotiable cheque, according to Section 130 of the Negotiable Instruments Act 1881. This indicates that the transferee will not be able to offer a greater title than the transferor, even if the cheque is further transferred.


  1. Account Payee Crossing/ Restrictive Crossing

The Account Payee crossing is a form of special crossing that prevents a cheque from being redeemed. A cheque is stated to be crossed specifically with an account payee by putting the words ‘account payee’ between the parallel lines.


The amount of the cheque must be credited solely to the account of the payee, the individual identified in the cheque, or his agent, according to an account payee crossing.

In the case of a special or limited crossing, the cheque must bear the name of the bank, with or without the phrase “not transferable,” according to Section 124. This means that the payment can only be made to that specific bank.

How to Cross a Cheque?

For a payee-only (non-transferable) cheque, follow these steps:

  • Draw two parallel lines across the upper left-hand corner of the cheque to cross it.
  • On the cheque, remove “or bearer” and replace it with “Account Payee Only” (or “A/C Payee Only”).

Why need to Cross Cheque?

Following are some of the substantial reasons for which a cheque should be crossed:

  1. Minimizes the risk: The crossing of the cheque instructs the paying banker to pay the amount to the payee or holder, presenting the amount at the counter solely via the banker. It’s a good technique to reduce the danger of data loss or falsification.
  1. Instructions for Paying: Crossing is a method for a paying banker to send money to a bank in general or to a specific bank, depending on the situation.
  1. Payment through Bank: A crossed cheque can only be secured by a banker, making it simple for the holder to submit it with a fraction of the respectability and credit that is known. You may ensure that the specified amount cannot be cashed and can only be credited to the payee’s bank account by utilising a crossed cheque.
  1. The receiver of the Amount: The money obtained may readily be traced for any purpose because only a banker assures the payment of a crossed cheque.
  1. Negotiability: Merely the crossing of a cheque would not affect the negotiability.

Crossings in Detail

General Crossing

The general crossing of a cheque is dealt with under Section 123 of the Negotiable Instruments Act. A cheque is typically regarded to be crossed in the following cases:

  • If there are two parallel transverse lines drawn across the cheque face.
  • If the abbreviation “& C” appears between the two parallel transverse lines on the cheque.
  • The phrase “Not Negotiable” should be put between the two parallel lines on the cheque.
  • When the words “A / C. Payee” appear between the two parallel transverse lines on a cheque.

Implications of General Crossing

  • The universal crossing has the effect of requiring any other banker to submit such a cheque to the paying banker.
  • Payment must be made utilizing a bank account and not at the bank’s payment counter.
  • The banker would then ensure that the amount of the cheque is credited to either the owner’s or the payee’s account.

Special Crossing

The Negotiable Instruments Act, section 124, states that

  • The banker’s name had to be put across the face of the cheque for it to be considered crossed.
  • A cheque must not be crossed by drawing two parallel lines unless it is a specific crossing.

The Negotiable Instruments Act, section 124, states that:

The banker’s name had to be put across the face of the cheque for it to be considered crossed.

A cheque must not be crossed by drawing two parallel lines unless it is a specific crossing.

– Restricted Crossing is another name for it.

– It is not necessary to draw two transverse lines.

– The banker’s name is written across the cheque’s face.

– The shortened term’& Co.’ may or may not appear in the banker’s name.

– Payment may only be made through the crossing’s bank. The banker named at the crossing might select another banker as his agent to collect such cheques. As a result, it is more secure than ‘usually’ crossed cheques. Specially crossed cheques cannot be converted to General Crossing cheques.


Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.