– The RBI has also stated that “account payee” cheques of third parties should not be
• Cheques that are double crossed.
– These are to be collected by the banker specified.
– It cannot be crossed again as the purpose of the first is frustrated by the second crossing.
This is only permitted if the bank to whom it is crossed does not have a branch at the
paying banker’s place.
• Cheque crossing
o Holder of a cheque can cross it or add to existing crossing.
o Banker to whom it is crossed can cross it.
o Cheque crossings can be opened by the drawer by cancelling the crossing with his full
o The Negotiable Instruments Act specifically states what amounts to a crossing. A
cheque with the words “not negotiable” without the two traverse lines is not a crossed
cheque. The traverse lines are essential for a crossing.
o If a cheque bears a single line it is not a crossed cheque.
o It is presumed that the banker on whom it is drawn has made payment to a banker who
acts for the true owner of the cheque, though in fact the amount of the cheque may not
reach the true owner. In short the banker is protected.
• Liability on wrong payment of a crossed cheque.
– If a crossed cheque is wrongly paid, the banker is liable to the true owner for any loss he
• Protection on uncrossed cheques
– If the banker pays an uncrossed cheque in due course, he is authorized to debit the
account of his customer with the amount so paid irrespective of the genuineness of the
indorsement on the cheque.
• Protection in respect of crossed cheques
– When a banker pays a cheque drawn by his customer, he can debit the drawer’s account
even though the amount of the cheque does not reach the owner.
• Prerequisites for claiming protection
– The payment has been made in due course: