Quick Answer: What Is The Effect Of Not Negotiable Crossing A Cheque?

What are the effects of crossing a Cheque?

Adding a crossing to a cheque increases its security in that it cannot be cashed at a bank counter but must be paid into an account in exactly the same name as that which appears on the ‘payee’ line of the cheque (i.e.

the person who has received the cheque, who is legally the “payee” and “holder” of the cheque)..

What is the difference between open Cheque and crossed Cheque?

A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed. … An open cheque means the cheque can be deposited in the bank account only. A crossed cheque can only be cashed through a bank of which the payee of the cheque is a customer.

What is the purpose of crossing Cheque?

Adding a crossing to a cheque increases its security in that it cannot be cashed at a bank counter but must be paid into an account in exactly the same name as that which appears on the ‘payee’ line of the cheque (i.e. the person who has received the cheque, who is legally the “payee” and “holder” of the cheque).

What are the essential of Cheque?

Instrument in writing : A cheque must be in writing. An oral order to pay does not constitute a cheque. 2. It should be drawn on banker: It is always drawn on a specified banker. A cheque can be drawn on a bank where the drawer has an account, saving bank, or current.

What is the meaning of not negotiable on a Cheque?

You may write the words ‘not negotiable’ between the two parallel lines on your cheque. This means that if the cheque is transferred to another person, the person who obtains the cheque has no greater rights to it than the person who gave it.

Who has the right to crossing a Cheque?

126 of the Negotiable Instruments Act states that crossed cheques are usually only paid to a banker. For Special Crossing- A cheque crossed in particular should only be paid to the banker to whom it is crossed or who is a collection agent.

What do you mean by crossing of Cheque?

A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. This double-line notation signifies that the check may only be deposited directly into a bank account.

What is double crossing of Cheque?

(4) DOUBLE CROSSING – When a cheque bears two special crossing, is called Double Crossing. In this second bank act as agent of the first collecting banker. It is made when the banker in whose favour the cheque is crossed does not have branch where the cheque is paid.

What is the difference between crossed and uncrossed Cheque?

An uncrossed cheque or an open cheque is a cheque that has not been crossed with two parallel lines on the top left corner. Such cheques can be encashed at any bank. You can collect the money for the cheque from the bank counter. It can also be transferred to the bank account of the person who presented the cheque.

What is special crossing of Cheque?

Special Cheque Crossing In special crossing, the cheque bears across its face an addition of the banker’s name, with or without the words ‘not negotiable’. In this case, the paying banker will pay the amount of cheque only to the banker whose name appears in the crossing or to his collecting agent.

Do you need to write not negotiable on a Cheque?

Most people “cross” their cheques and write the words “not negotiable” between the lines. This is a good idea because it tells the bank that the cheque should not be paid on demand, and must instead be paid into the account of the payee.

What happens when a bank dishonours a Cheque?

A cheque is said to be honoured, if the banks give the amount to the payee. While, if the bank refuses to pay the amount to the payee, the cheque is said to be dishonoured. In other words, dishonour of cheque is a condition in which bank refuses to pay the amount of cheque to the payee.

What are the two types of Cheques?

Based on these essentials, we explore the different types of cheques in India.Bearer Cheque. A bearer cheque is the one in which the payment is made to the person bearing or carrying the cheque. … Order Cheque. … Crossed Cheque. … Open cheque. … Post-Dated Cheque. … Stale Cheque. … Traveller’s Cheque. … Self Cheque.More items…

What are the disadvantages of Cheque?

Disadvantages of chequesCheques are not legal tender and other creditors may refuse to accept them.They may be valueless if the drawer has no funds in his/her account.Depositing cheques into an account is time consuming.Cheques are not suitable for small amounts.People without bank accounts will be inconvenienced by crossed cheques.More items…•

Who Cannot cross a Cheque?

Where the Cheque is uncrossed, the holder may cross it generally or specially. Where it is crossed generally, he may cross it specially. Where it is crossed generally or specially he may add the words ” Not Negotiable”.