The cheque crossed generally does not ceases to be negotiable further. In case of special crossing, two parallel transverse lines are not necessary. The person to whom the instrument is endorsed is called the endorsee. They could be put any where on the cheque. The person to whom the cheque is issued is entitled to receive the sum mentioned in the cheque provided the account has sufficient balance from the bank where the cheque issuer holds his acc … ount A cheque may either be an open cheque or a crossed cheque. If he credits the proceeds to a different account, he is guilty of negligence and will be liable to the true owner for the amount of the cheque.
They may be either lost or stolen and the finder or thief can get it encased at the bank unless the drawer has in the meantime countermanded payment. So let us discuss the various crossing tools to safeguard a cheque in India. Banking in the New Millennium. Generally we put it on top left of the cheque. When a cheque is crossed it in effects means, an instruction by the client not to pay the cheque directly over the counter but to a banker only for crediting the payees account with the bank. The name of the banker itself constitutes special crossing. 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 collecting banker is duly bound to collect the proceeds of the cheque in the account of the Payee only. Note tha … t the combination of mandate that originally signed the cheque must sign to 'open' it. This means that the person to whom the cheque is made out signs the back thus giving their permission for it to be presented for payment. Here we are broadly classifying the types of cheques as open cheques or uncrossed cheques and crossed cheques. Also Anyone can download Effect of crossing of cheque by pace2race's newest and oldest mp3,hd mp4 songs. So, he will not collect if for any person other than the payee.
It only takes away the main feature of negotiability, which is, that a holder with a defective title can give a good title to a subsequent holder in due course. The collecting banker can collect the proceeds of the cheque in the account of that person mentioned on the cheque. With the passage of time, crossing of cheques came to have legal recognition. Special Crossing : It is a cheque in which the name of the bank is written between the two parallel lines and hence it can be paid to that specific banker only. The crossing of a cheque is intended to ensure that its payment is made to the right payee. Special Crossing can never be converted to General Crossing. Which means anyone having open cheque can get the payment from the bank counter.
Inclusion of the name of a banker is essential. This is amazing and informative for the students of Baking and Finance. In Special Crossing paying banker to honor the cheque only when it is presented through the bank mentioned in the crossing and no other bank. Thus crossing provides a protection and safeguard to the owner of the cheque as by securing payment through a banker; it can easily be detected to whose use the money is received. Most of the time the banks simply order the checks for you through other check printers and mark up the price even further.
So, many private and some public sector banks are issuing at par chequebooks to their account holders. But, we can not say that, it gives full protection in the sense, that, an unscrupulous person, who has an account in the same bank but at a different branch, can encash it by forging the signature of the payee. Cheques may be crossed by three persons. Ordinarily, the payee of a cheque is entitled to encash at the counter of the paying banker by presenting it within the specified banking hours. Who can cross a cheque? Object: Crossing provides a protection and safeguard to the owner of the cheque as by securing payment through a banker; it can easily be detected to whose use the money is received.
Crossing is a direction to the banker not to pay the cheque across the counter but to pay to a bank only or to a particular bank in an account with the bank. The banker is under an obligation to pay the cheque according to the direction of the drawer conveyed through the crossing on the cheque. This means that the person who eventually receives the money can be traced because there will be a record of the deposit. However, it can be detected. An open cheque may be a bearer cheque or an order one. A special crossing gives more protection the cheque than a general crossing.
His initials are not sufficient for this purpose. By using crossed cheques, cheque writers can effectively protect the instrument from being stolen or cashed by unauthorized persons. 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. Section 123 to 131 of the Negotiable Instrument Act contain provisions relating to the crossing. Thus, crossing is necessary in order to have safety. Mere writing a name of a bank across the face of the cheque constitutes special crossing. An order instrument means instrument payable to a specified person or to the order of that specified person.