Sections 123 to 130 of the Negotiable Instruments Act(hereinafter referred as the Act) deals with crossed
General Crossing of Cheques
One can draw two parallel transverse lines on the face of the cheque and may write additional words "and company" or any abbreviation thereof between the lines for crossing the cheque generally. The drawing of two parallel transverse lines simply is enough for general crossing. The provision is contained in Section 123. He can also add the words "not negotiable" if he wishes so.
Effect of General Crossing
When a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker.
Special Crossing of Cheques
When a cheque has an addition of name of a banker, either with or without words "not negotiable", this cheque shall be deemed to be crossed specially. Section 124 of the Act deals with the same.
Effect of Special Crossing
When a cheque is specially crossed, the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed.
S. 131A, which was introduced in the statute by Act 33 of 1947, makes all the provisions for crossing of cheques applicable to the drafts also. That section says: “The provisions of this chapter shall apply to any draft, as defined in S. 85A, as if the draft were a cheque.”
Crossing after issue is dealt with in Section 125 where a cheque is uncrossed, the holder may cross it generally or specially. If it is generally crossed, the holder may cross it specially. If it is generally or specially crossed, the holder may add the words "not negotiable". If it is specially crossed, the banker to whom it is crossed may again cross it specially to another banker or his agent for collection.
The effect of crossing the cheque specially to more than one banker is dealt with in Section 127 of the Act. In such case the banker on whom it is drawn shall refuse the payment. But this is not applicable when crossed to an agent for the purpose of collection.