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.