CMA Foundation · Fundamentals of Business Laws and Business Communication · Negotiable Instruments Act, 1881
Ananya Traders receives an uncrossed cheque drawn by a customer. Under the Negotiable Instruments Act, 1881, what may the holder of this uncrossed cheque do?
The holder of an uncrossed cheque may cross it either generally or specially. The Act gives the holder this power after issue, so it is not limited to the drawer or to one type of crossing.
- ACross it generally or speciallyCorrect
- BCross it only generally, and never specially
- CCross it only specially, and never generally
- DNot cross it at all, because only the drawer can cross a cheque
Explanation
Section 125 says that where a cheque is uncrossed, the holder may cross it generally or specially. The holder's power is not limited to one kind of crossing, and it is not confined to the drawer.
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