Crossed Cheque?

When two parallel lines are drawn across the face of a cheque, it is called crossed cheque. A crossed cheque can not be paid at the counter. It can be paid only through an account.

Kinds of Crossing:

01. General Crossing,

02. Special Crossing.

01. General Crossing:

When a cheque bears two parallel lines across its face, it is called a general crossing. A cheque bearing a general crossing can be paid only through an account. General crossing is usually put either at the top left corner or in the middle of the cheque.

02. Special Crossing:

When the name of the particular bank is written across the face of a cheque, it is called a special crossing. As per Section -124 of N.I Act, a cheque shall be deemed to be crossed specially and to a particular banker "Where a cheque bears across its face an addition of the name of a banker, either with or without the words 'not negotiable'".

When a cheque bears a special crossing, it can be paid only to that bank which is mentioned in the crossing. In case of special crossing, drawing of two parallel lines is not necessary. Simply writing of the bank is sufficient.

Crossing of Cheques

A cheque may be classified -

(a) an open cheque which can be presented for payment by the holder at the counter of the drawee's bank.

(b) a crossed cheque which can be paid only through a collecting banker.

Crossing Defined: A cheque is said to be crossed when two transverse parallel lines with or without any words are drawn across its face. A crossing is a direction to the paying banker to pay money generally to a banker or a particular bankers as the case may be, and not to the holder at the counter. Crossing may be written, stamped, printed or perforated.

Object of Crossing: Crossing affords security and protection to the true owner, since payment of such a cheque has to be made through a banker. It can, therefore, be easily detected to whose use the money has been received. Cheques are crossed in order to avoid losses arising from open cheques falling into the hands of wrong persons.

Crossing of a cheque does not affect its negotiability. Crossed cheques are negotiable by delivery in case they are payable to bearer and by endorsement and delivery where they are payable to order. Holder of a crossed cheque, who has no account in any bank, can obtain payment by endorsing it in favour of some person who has got an account in a bank.

Conversion?

Conversion is another word for wrongful payment of a customers cheque. All cheques are drawn by the account holders to be payable to the intended person. If the bank pay it to any person other than the intended person, the payment will be wrongful payment or conversion.

Blank Cheque?

A cheque without any details bearing only the signature of the drawer is called blank cheque. This is also called inchoate (incomplete) instruments.

Ante-dated Cheque?

A cheque bears a date earlier to the date on which the cheque is drawn. For example, a cheque drawn on January 15 bearing date January 10 is an ante-dated cheque. Bank generally pay an ante-dated cheque.

Post-dated Cheque?

A cheque bearing a future date is called post-dated cheque. A bank can not pay cheque before date of cheque. Post dated cheque is not paid by a bank.

Stale Cheque?

A cheque, after 6 months from its date of issue is regarded as 'Stale' and such a cheque is not paid by a bank. Stale cheques are also called 'out of date' cheque. A cheque should be encashed as soon as possible.