Business Laws · The Negotiable Instruments Act, 1881

Crossing of Cheques and Types of Crossing

Updated 4 October 2026

Crossing a cheque means drawing two parallel transverse lines across its face, or adding a banker's name, so that payment is made only through a bank. Sections 123 and 124 give general and special crossing. Section 130 covers 'not negotiable'. Answer by stating the type, its section and its effect.

Understand Crossing of Cheques and Types of Crossing

A cheque is normally payable over the counter to whoever presents it properly. That is risky if it is lost or stolen. Crossing is a safety device. It tells the paying bank how the cheque may be paid.

The Act recognises two basic crossings. A cheque is crossed generally (Section 123) when it bears across its face the words "and company" or an abbreviation, between two parallel transverse lines, or simply two parallel transverse lines. This holds with or without the words "not negotiable". A cheque is crossed specially (Section 124) when it bears across its face the name of a banker, with or without the words "not negotiable". It is then crossed to that banker.

The words "not negotiable" are an addition to either crossing. Under Section 130, a person taking a cheque crossed generally or specially and bearing these words does not have, and cannot give, a better title than the person he took it from had. The cheque stays transferable. But a person who takes it from a thief gets no title. Many students wrongly think the words stop transfer. They do not.

Account payee crossing is the words "account payee" added to the crossing. It is a common banking practice. The text provided to you does not deal with it, so state it in plain words without a section number. Its purpose is to direct that the money goes to the account of the named payee only.

Crossing can also be done after issue (Section 125). An uncrossed cheque can be crossed generally or specially by the holder. A generally crossed cheque can be crossed specially. The holder can add "not negotiable" to a crossed cheque. A banker to whom a cheque is specially crossed may cross it again specially to another banker, his agent, for collection.

Key rules to remember

General crossing (Section 123): Two parallel transverse lines, or "and company" (or abbreviation) between two parallel lines; with or without "not negotiable"; Deemed a crossing. The cheque is crossed generally.
Special crossing (Section 124): Name of a banker across the face; with or without "not negotiable"; Cheque is crossed specially, to that banker.
Not negotiable (Section 130): Transferee's title ≤ transferor's title; Applies to a cheque crossed generally or specially bearing the words. Transferee cannot get, or give, a better title.
Crossing after issue (Section 125): Uncrossed → general or special; general → special; crossed → add "not negotiable"; special → another banker as agent for collection; Holder does the first three. The banker to whom it is specially crossed does the last.
Account payee crossing: "Account payee" added to the crossing; Banking practice meaning proceeds go to the payee's account. No section number given here.

How to solve Crossing of Cheques and Types of Crossing questions

Use this method for any question on crossing, whether theory or a short case.

1Read the cheque description. Note what is written across its face: lines, "and company", a banker's name, "not negotiable", "account payee".
2Classify the crossing. Lines or "and company" mean general (Section 123). A banker's name means special (Section 124).
3Check for the words "not negotiable". If present, apply Section 130.
4Check whether the crossing was done after issue. If so, use Section 125 to see who may add what.
5Identify who holds the cheque and from whom he took it. Section 130 depends on the transferor's title.
6Apply the effect. For "not negotiable", the transferee's title cannot be better than the transferor's. For a thief or finder, the title is nil.
7Write the conclusion in one clear line naming the person who gets or lacks good title.

Quickest way: Provision-Facts-Conclusion in four lines

When to use it: For short case-based questions where marks are for naming the provision and reaching a clear conclusion.

Line 1: name the crossing and its section, for example "generally crossed, Section 123".
Line 2: state the rule in plain words, for example Section 130 gives no better title than the transferor had.
Line 3: apply it to the names in the question. Say who took from whom.
Line 4: conclude. Say who has good title or who must bear the loss.
Memory aid: 123 is General (lines), 124 is a banker's name, 125 is later crossing, 130 is title.

Common mistakes in Crossing of Cheques and Types of Crossing

Saying "not negotiable" makes the cheque non-transferable.
The word looks like it blocks transfer.
Fix: The cheque can still be transferred. Section 130 only says the transferee gets no better title than the transferor had.
Treating "and company" alone, without lines, as general crossing.
Students shorten the rule.
Fix: Section 123 requires "and company" or an abbreviation between two parallel transverse lines. Two lines alone also suffice.
Mixing up Sections 123 and 124.
Both deal with crossing and have close numbers.
Fix: 123 = general (lines). 124 = special (banker's name).
Forgetting that crossing can be done after issue.
Students think only the drawer crosses.
Fix: Under Section 125 the holder can cross an uncrossed cheque, and a banker to whom it is specially crossed may cross it again to another banker as agent for collection.
Giving a section number for account payee crossing.
Students want every point tied to a section.
Fix: The provided text does not cover it. Describe it as a banking practice and explain its purpose without citing a section.
Saying a specially crossed cheque can be crossed generally.
Confusion about the direction of change.
Fix: Section 125 lets a generally crossed cheque be crossed specially, but does not allow a special crossing to be made general.

Worked examples

Example 1

A draws a cheque in favour of B and crosses it generally with the words "not negotiable". A thief steals it from B and transfers it to C for value, who acts in good faith. Can C get a good title?

Show the solution

Provision: the cheque is crossed generally (Section 123) and bears the words "not negotiable". Section 130 applies.
Rule: a person taking such a cheque shall not have, and cannot give, a better title than the person he took it from had.
Facts: the thief took it from B. The thief had no title.
Application: C took from the thief, so C's title can be no better than the thief's, which is nil.

Answer: C does not get a good title, even though he acted in good faith and gave value. The cheque remains B's, because of Section 130.

Example 2

X receives an uncrossed cheque. He wants to make it safer. State what X may do under the Act and what the crossing does.

Show the solution

Provision: Section 125 allows the holder to cross an uncrossed cheque generally or specially.
Option 1: X may draw two parallel transverse lines. This is a general crossing under Section 123.
Option 2: X may write a banker's name across the face. This is a special crossing under Section 124, and the cheque is crossed to that banker.
Further step: X may add the words "not negotiable" to either crossing. Under Section 130 any later taker then gets no better title than the person he took from.
Also: if X first crosses generally, he may later cross it specially. Section 125 allows this.

Answer: X may cross the cheque generally or specially, and may add "not negotiable". A generally crossed cheque can later be crossed specially. The added words protect the true owner by limiting the title a later taker can acquire.

Exam tips

Quote the section number with the crossing type. It shows the examiner you know the provision.
For Section 130 questions, always compare the transferee's title with the transferor's title. That comparison is the answer.
Draw a small sketch of two parallel lines with the words if the question asks for a description. It saves words.
Do not cite a section for account payee crossing. State the effect in plain words.
Remember the three powers in Section 125. They are often asked in short-note form.

Practice questions from The Negotiable Instruments Act, 1881

Crossing of Cheques and Types of Crossing: frequently asked questions

What is the difference between general and special crossing?

A general crossing has two parallel transverse lines, with or without "and company" or "not negotiable" (Section 123). A special crossing has the name of a banker across the face (Section 124). In special crossing the cheque is crossed to that banker.

What is not negotiable crossing under Section 130?

It means a crossed cheque bearing the words "not negotiable". A person taking it gets no better title than the person he took it from had, and cannot give a better one. The cheque can still be transferred.

Can a crossing be cancelled?

The provided Act text does not give a rule for cancelling a crossing. Do not cite a section for it. Section 125 only lists what can be added after issue.

What is the legal effect of an account payee cheque?

It is a banking practice that directs payment into the payee's account. The text given here has no section for it. In an answer, describe the purpose and avoid naming a section.