TYPES OF CROSSING

1. BANKING & PRACTICE
DONE BY
S.BHUVANESVARI M.A.,

3. CHEQUE:
A cheque is a bill of exchange drawn on a specified banker and not expressed to be
Payable otherwise than on demand”(Section 6).
The Cheque Book contains blank forms of cheques which are used as an instrument to
withdraw money from the bank. The Cheque Book also contains a Requisition Slip which,
dully filled in is presented by the customer for obtaining another cheque book from the
Bank.

4. Meaning of Negotiation:
According to Section 14, “when a promissory note, bill of exchange or cheque is
transferred to any person, so as to constitute that person the holder thereof, the
instrument is said to be negotiated.”
TYPES OF CROSSING
Crossing on cheques is of two types:
 General Crossing and
 Special Crossing
Crossing is an ‘instruction’ given to the paying banker to pay the amount of the cheque
through a banker only and not directly to the person presenting it at the counter. A
cheque bearing such an instruction is called a ‘crossed cheque’
General Crossing :
According to Section 123, “ where a cheque bears across its face an addition of word
and company or any abbreviation thereof, between two parallel transverse lines, or two
parallel transverse lines simply, either with or without the words ‘not negotiable’ that
addition shall be deemed a crossing and the cheque shall be deemed to be crossed
generally.”

5. General Crossing :
It is to be noted from the above that drawing of two parallel transverse lines on the face of
the cheque constitutes ‘general crossing’. The lines must be on the face of the cheque,
parallel to each other, and in cross direction.

6. SpecialCrossing:
According to section 124,”where a cheque bears across its face an addition of the name
of a banker, either 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”.
The addition of the name of a banker across the face of a cheque constitutes ’special
crossing. Drawing of two parallel lines on the face of the cheque is not essential in
case of special crossing. Special crossing differs from General crossing because in case
of the former inclusion of the name of a banker is essential whereas in General
crossing drawing of two parallel transverse lines is a must.

7. Double Crossing :
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, who acts as his agent for the purpose of collection of the
cheques. In such a 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,e.g.,
____________________________________________________
Indian Bank
to
HDFC Bank
as agent for collection
-------------------------------------------------------------------------------
Double crossing in very particular.

8. Endorsement
Section 15 defines endorsement as follows:
“when the maker or holder of a negotiable instrument signs the same, otherwise than as
such maker, for the purpose of negotiation, on the back or face there or on slip of paper
annexed there to, or so signs for the same purpose a stamped paper intended to be
completed as a negotiable instrument, he is said to have endorsed the same and is called
the endorser.”
General Rules regarding the Form of Endorsements
An endorsement must be regular and valid in order to be effective.
1. Signature of the endorser.
2. Spelling.
For ex: If the payee’s name is wrongly spelt as ‘Virendra Perkash’
instead of ‘Virendra prakash’
3. No addition or omission of initial of the name.
For ex: A cheque payable to S.C Gupta should not be endorsed as S. Gupta
4. Prefixes and suffixes to be excluded.

9. REGULAR FORMS OF ENDORSEMENT
Married woman. If a cheque or bill of exchange is payable to a married woman, the
endorsement should be as follows:
Payee Regular Endorsement Irregular Endorsement
-------------------------------------------------------------------------------------------------------------------
Mrs. Asha Gupta Asha Gupta Mrs. Asha Gupta
Or
(Mrs.) Asha Gupta
______________________________________________________________________
Smt. R.K. Gupta Prabha Gupta Smt. R. K. Gupta
(wife of Mr. R.K. Gupta)
Or Or
Prabha Gupta
(Smt. R.K. Gupta) R. K. Gupta

10. kinds of endorsements
According to the Negotiable Instruments Act, endorsements are of the following kinds:
1. Endorsement in Blank.
2. Endorsement in Full.
3. Conditional Endorsement.
4. Restrictive endorsement.
5. Endorsement ‘Sans Recourse’.
6. Facultative Endorsement.
ENDORSEMENT IN BLANK:
If the endorser signs his name only, the endorsement is said to be in blank (Section 16). The endorser
does not specify the name of endorsee with the effect that an instrument endorsed in blank becomes
payable to bearer. For EX: if a cheque is payable to ‘X’ or order and merely signs on its back, such
endorsement is called endorsement in blank.

11. ENDORSEMENT IN FULL:
If in addition to his signature, the endorser adds a direction to pay the amount mentioned
in the instrument to, or to the order of a specified person, the endorsement is said to be
‘endorsement in full’ (Section 16). If in above illustration X adds the words ”pay to Y” or
“pay to Y or order”, such endorsement is called endorsement in full.
For Ex: A cheque is endorsed in blank by X by signing on its back Y, its holder may
convert the endorsement in blank into an endorsement in full by writing above X’s
signature “pay to Z or order”. Thus Z will become the endorsee, but Y will no be liable to
him as the endorser because his name does not figure in the endorsement in full. If the
cheque is dishonoured, Z can make all other parties except Y liable on the cheque.

12. CONDITIONAL ENDORSEMENT:
If the endorser of a negotiable instrument, by express words in the endorsement , makes
his liability or the right of the endorsee to receive the amount due thereon, dependent on
the happening of a specified event, although such event may never happen, such
endorsement is called a Conditional endorsement (Section 52).
For Ex: “pay C if he returns from USA”. Thus C gets the right to receive payment only on the
happening of a particular event ,i.e., if he returns from USA. If the event does not take
place, the endorsee cannot sue any of the parties.
Conditional endorsements do not make the instruments non-transferable.

13. RESTRICTIVE ENDORSEMENT:
The endorsement may by express words, restrict or exclude the right to negotiate or may
merely constitute the endorsee an agent to endorse the instrument or to receive its
contents for the endorser or for some other specified person.”Such an endorsement
prohibit further endorsement and is called Restrictive endorsement.
ENDORSEMENT ‘SANS RECOURSE’:
An endorser of a negotiable instrument may, by express words in the endorsement ,
exclude his own liability thereon (Section 52). For example, if R endorses a cheque as
follows:
i. Pay to X or order at his own risk
ii. Pay to C without recourse to me
FACULATATIVE ENDORSEMENT:
The endorsee must give notice of dishonour of the instrument to the endorser, but the
latter may waive this duty of the endorsee by writing in the endorsement ’Notice of
dishonour waived’. The endorser remains liable to the endorsee for the non-payment of
the instrument.