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“ Crossing ” a cheque is a way of making even more certain that the money is paid to the correct person and not to someone else. By “ crossing ” the cheque in the ways that follow, you give the bank extra instructions about how it is to be paid. This is called limiting its negotiability.
If you draw a line to cross out the words “or bearer”, then you are telling the bank that the money cannot just be paid out to anyone who happens to present the cheque . It must be paid out to the person named on the “Pay” line . It is possible to get around this by “endorsing” the cheque . This means that the person to whom the cheque is made out signs the back thus giving their permission for it to be presented for payment.
If you cross out “to bearer” and draw two parallel lines across the front of the cheque (usually the top left corner is sufficient) then you are telling the bank that the money has to be paid into an account and cannot be cashed (exchanged for cash). This means that the person who eventually receives the money can be traced because there will be a record of the deposit .
Sec 123 of the Negotiable Instruments Act 1881 defines general crossing as follows:
“ 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 to be a ‘crossing, and the cheque shall be deemed to be crossed generally.”
Sec 124 of the Negotiable Instruments Act of 1881 defines
“ where a cheque bears across its face, an addition of the name of a banker, 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”