Crossing of Cheque
what is the effect of crossing a cheque in India?
The crossing of cheque means that amount of the cheque will be deposited to the account of the person in whose name the cheque is issued, this will show that the cheque amount is credited only to the bank account of the person named on the cheque. However it is not absolutely safe, the pilferer may open an account get the cheque credited and then close the account after realising the cheque amount
There are three different types of crossing and by crossing , we mean putting or drawing two parallel transverse lines on the front side of a cheque on upper left corner, with or without the use of the word like “& CO” “Not Negotiable”.
Following parties have the right to cross a cheque;
Drawer of the Cheque can cross the cheque at the time of writing the cheque. This crossing can be general, special or restricted.Holder of the cheque, can cross the cheque in his possession, if it is already not crossed by the drawer for any reason.Collecting bank crosses the cheque deposited with it, for receiving the amount of said cheque named therein or any uncrossed cheque is deposited by a customer in his account for collection. It is necessary to cross all the cheques before depositing.
It is possible that payment of a bearer or even of an order cheque is made or received to a wrong person. In this case bank has got no responsibility except for order cheque. Hence the main objective of the crossing is to make sure that the payment is made or credited to the right person. In case of any fraud or wrong payment , it is easy to detect the person or party receiving the wrong payment just by checking the record of the bank, because the said cheque is deposited , collected and posted in bank ledger though a bank account of the person concerned.
The other objective of crossing is that large amount of money is transferred from one person or place to another, without any risk of cash involved in payment.
The only disadvantages of crossing is that sometimes it becomes inconvenient for the holder of a cross cheque to get the cash at once if he is urgency. If the cross cheque is of the same branch or of local branch, then the inconvenience is not so much as compared to the out-station cross cheque, in which mail process involves and the efficiency of the other branch in releasing payments
There are three main types of crossing: