Crossing a Cheque - Explained in Hindi - YouTube

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Namaskar, my name is Mukul and you are welcome to Asset Yogi.

Where we don't lock the finance knowledge but unlock it.

In this video, we will be talking about a very common topic which is the crossing of a cheque.

Now, why do we cross the cheque? Definitely,

if we want to put money in someone's account then we should cross it.

It is known to all.

But, there are some minor details that we may not know or we miss.

So we will know about such fine details in this video.

And we will see how many ways we can cross a cheque?

And what are their meanings?

So you watch this video from the starting till last as always.

Let's go straight towards the blackboard.

So broadly there are two types of cheques.

One is your open cheque and the other is a cross cheque.

So before talking about the cross cheque, let us first know about the open cheque?

So obviously the cheque which has not been crossed is an open cheque.

And from open cheques, we can do cash payments or account transfers.

For eg., if this is an open cheque made in the name of Amit Kumar.

So either Amit Kumar can cash withdraw this Rs 7000.

Or he can transfer money by putting it in his account.

Now the open cheque is of two types.

One is your bearer cheque and another is an order cheque.

What is the meaning of bearer?

Bearer cheques can be basically encashed by anyone.

So either Amit Kumar can encash it.

Or then

whoever guy has this cheque,

so the meaning of this or bearer is whoever is the holder of that cheque.

He can also take out the cash or can transfer it to his account.

So it was a bearer cheque, the bearer cheque is risky too.

I write it also here.

Because if anyone gets this cheque then that guy can take money from the cheque.

Then one is your order cheque.

In order cheque, as here or bearer is written, so in place of or bearer here, or order is written.

Or if you cut this or bearer then it automatically becomes an order cheque.

In order cheque, either who's name is written gets the money.

Or whoever he orders, this Amit Kumar,

if wishes then he can transfer this cheque to someone's name, can endorse him.

That's why it is written as- or his.

So if he endorsed let's say to some third party, let's say to the name of Gourav.

If he endorses then Gaurav will get the money.

So this is your order cheque.

Now we will talk about crossed cheques.

In cross cheque, you have seen often that we draw two parallel lines like this

and it becomes a cross cheque.

These are also different ways to cross the cheques.

So what is the meaning of crossing a cheque?

This is basically an instruction of a drawer, drawer means whoever has crossed or made that cheque

in the name of drawee, so one the name of whose cheque is made is called drawee or payee.

So crossing a cheque simply means that cash payment cannot be done to the drawee or payee.

The money can be transferred to a bank account only.

So if we simply draw these two lines like this.

So it will be a cross cheque and its simple meaning is that

the money will be only transferred to a bank account, cash payment cannot be done.

These mainly can be four types of crossings.

One is General crossing then the Special crossing, then the Not negotiable crossing

and the last one is the A/c payee crossing.

Now, these three crossings are General crossing, Special crossing, Not negotiable crossing.

These are defined in the Negotiable Instruments act 1881.

But the A/c payee is not defined, but it has usually become a practice,

nowadays the A/c payee is very common.

So the A/c is most commonly used.

So we will see the difference between these types, and what is exactly their meaning?

Firstly we will talk about the General crossing.

So in the General crossing, these are the exact clauses that are been given,

These are the sections basically, Section 123 and Section 126 of Negotiable instruments act 1881,

are defined in it.

So see simply we read.

Cheque crossed generally- where a cheque bears across its face an addition of the words

"and company"

So either in- and company,

Or any abbreviation thereof, between two parallel transverse lines, or of two parallel transverse lines.

So if we write and company, inside those two parallel lines.

Or two parallel transverse lines simply.

This means if we simply draw the lines then also.

Either with or without words.

Whether it has words or not in it.

"not negotiable" that is we can write ABC company or non-negotiable also.

Or we can leave it empty like this then also it will be a cross cheque.

Now see here you can do on the corner and also here if you do like this

then also it will be considered as a cross cheque.

After that see what is written, where a cheque is crossed generally,

the banker on whom it is drawn shall not pay it otherwise than to a banker.

That means cash payment cannot be done, payment can be done to a banker only.

Money can be transferred to a bank account only.

So if we summarise the General crossing,

So the amount cannot be paid in cash definitely.

And the amount can only be credited to the bank account of someone.

Either a named person,

either the money can be given to Amit Kumar through this cheque.

Or any endorsee, now Amit Kumar can transfer it to the name of any third party.

So it is not like it will issue to only Amit Kumar if you have crossed a cheque.

So it is not like that the money will only be credited to Amit Kumar's account

if Amit Kumar endorsed it to someone

so that money can also be credited to his name through this cheque.

If ABC& Co. is written in the cross cheque then this money will only be credited to ABC & Co.' account.

Or if it is written as not negotiable by crossing, so it is not negotiable crossing.

Now we will discuss Not Negotiable crossing in more detail.

Before that, we discuss Special crossing.

We will see clauses of Special crossing.

So Section 124 and here also it is part of Section 126.

So it is defined in Section 124 and Section 126.

I have extracted the exact sections from the Negotiable instruments act 1881.

So see it has been clearly written,

Cheque crossed especially- where a cheque bears across its face an addition of the name of a banker,

either with or without the words "not negotiable", that addition shall be deemed a crossing

and the cheque shall be deemed to be especially, and to be crossed to that banker.

Its means that when you cross the cheque and write the name of the bank

So it is called a Special crossing.

Then what is being written?

Where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to

the banker to whom It is crossed or his agent for collection.

That means this money can be credited only to the account of the HDFC.

If now Amit Kumar doesn't have a bank account in the HDFC bank,

then this cheque will be useless for him.

Because money can only be transferred to the HDFC bank account.

So if Amit Kumar has a bank account in the HDFC bank then only he can encash it.

So what is the meaning of Special crossing if we summarise then obviously,

cash payment cannot be done by also through the special crossing.

And the named bank that is, in this case, is HDFC bank,

so the money will be credited to the account of that bank only.

So it was our special crossing.

Now we will talk about Not Negotiable crossing.

So it was defined in Section 130 of the Negotiable Instruments act 1881.

A person taking a cheque crossed generally or especially,

so whether it's general crossing or the special crossing, if not negotiable is written in it.

then it shall not have and shall not be capable of giving a better title to the

cheque than that which the person from whom he took it had.

See maybe it will look complicated in hearing, I will explain this with an example.

So the Not negotiable crossing, first thing

it is not like that, it cannot be transferred to the name of someone.

So Amit Kumar can also transfer it to a third party, so definitely it can be endorsed.

So not negotiable doesn't mean the not transferable.

What is the meaning of Not negotiable?

Transferee cannot have or give a better title to the cheque than Transferor.

So understand not negotiable crossing like this,

suppose this cheque has been issued to the name of Amit.

He will be the let's say owner of original cheque.

Let's say there is X person, who steal this cheque, let's say stole from this guy.

And he endorsed it to someone named Gaurav.

Right.

If he endorse it to the name of Gourav then Gourav got all the right to encash it.

So Gaurav let's say encashes it.

But the right of Amit,

that Amit, If not negotiable is written on the cheque like this.

So Amit has more rights than Gourav.

Because this cheque has been stolen, Amit didn't endorse it by himself.

So in such a case, Amit's title will be considered better than Gourav's title.

And Gourav has to return money to Amit.

Not negotiable means this.

And yes, if Amit wants to endorse it by himself then he can do it in the name of anyone.

But its title will be considered always better than whatever the further transferees will be.

the title will be considered better from them,

means he will be considered as the original holder of the cheque. Right.

So this is what, not negotiable means.

Then if you write like this HDFC Bank Ltd. and with that also write not negotiable.

So it is now a special crossing.

This money will only be credited to HDFC bank and with that, it is also not negotiable.

Not negotiable is not much common however, you should know.

Now we will talk about the most common type of crossing, which is A/c payee crossing.

Now though the a/c payee crossing is used as the most common cross cheque.

But it is not defined in the Negotiable Instruments Act.

But however, it is important for us to know about this.

Because it is often used.

What is the meaning of A/c payee?

Amount can only be paid in the account of the "Named Payee".

So money can only be credited to the account of Amit Kumar.

Amit Kumar cannot transfer it, so this can not be transferred to any other person.

Amit Kumar cannot withdraw cash.

Amit Kumar can only put money in any of his bank accounts.

Let's say if only A/c payee is written on it.

So Amit Kumar can put in any of the bank accounts,

whether its account is in HDFC, ICCI or in Axis account, he can put in any of the banks A/c

And can withdraw the money.

Suppose if it is written like this,

HDFC Bank Ltd. and with that if A/C payee is written, then Amit Kumar

can credit this money to his one account of the HDFC bank only.

And cannot submit to any other bank.

So this is a special crossing which is basically an A/C payee special crossing.

So many people are confused that what is difference between general crossing and A/c payee crossing?

So see as I said earlier to you that in general crossing, money can be transferred to anyone.

Amit Kumar can transfer money to the name of any third party.

He can put it in his account and withdraw the money.

But in A/C payee the money will be credited only to the account of Amit Kumar.

So I think I have covered all the major points related to the crossing of the cheque

and we have seen all the types of crossings.

So that's all in this video.

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then you can comment them down in the comment section.

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