Sections 123 and 124 of Negotiable Instruments Act 1881: General and Special Crossing of Cheques

Sections 123 and 124 of the Negotiable Instruments Act, 1881 define two principal forms of cheque crossing. Section 123 explains when a cheque is crossed generally, while Section 124 explains when a cheque is crossed specially to a named banker.

Statutory context: Sections 123 and 124 appear in Chapter XIV, "Of Crossed Cheques". They identify the markings that constitute general and special crossings. The following provisions of the Act regulate crossing after issue and the manner in which crossed cheques are to be paid.

Section 123 - Cheque Crossed Generally

Where a cheque bears across its face an addition of the words "and company" or any abbreviation thereof, between two parallel transverse lines, or of two parallel transverse lines simply, either with or without the words "not negotiable", that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed generally.

Meaning of general crossing

A cheque is crossed generally when the crossing on its face satisfies Section 123. The provision recognizes two parallel transverse lines, either by themselves or with the words "and company" or an abbreviation. The words "not negotiable" may also appear, but they are not essential for a crossing to qualify as a general crossing under Section 123.

The crossing must appear across the face of the cheque.
Two parallel transverse lines are sufficient for a general crossing.
The words "and company" or an abbreviation may appear between the lines.
The words "not negotiable" may be included or omitted.
No particular banker is named in a general crossing.

Section 124 - Cheque Crossed Specially

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 crossed specially, and to be crossed to that banker.

Meaning of special crossing

A special crossing identifies a banker on the face of the cheque. Under Section 124, the addition of the name of a banker constitutes a special crossing, whether or not the words "not negotiable" are also used. The cheque is treated as crossed specially to the banker whose name appears in the crossing.

The name of a banker appears across the face of the cheque.
The words "not negotiable" may be added but are not mandatory.
The cheque is treated as specially crossed to the named banker.
The payment rules applicable to specially crossed cheques are dealt with in the succeeding provisions of Chapter XIV.

General Crossing and Special Crossing - Difference

Point	General Crossing - Section 123	Special Crossing - Section 124
Basic marking	Two parallel transverse lines, with or without "and company" or its abbreviation.	Name of a banker across the face of the cheque.
"Not negotiable"	May be present or absent.	May be present or absent.
Named banker	No banker needs to be named.	A banker is specifically named.
Statutory result	The cheque is deemed crossed generally.	The cheque is deemed crossed specially to the named banker.

Related Provisions on Crossed Cheques

Section 125 deals with crossing after issue. Section 126 regulates payment of a cheque crossed generally, while Section 127 addresses a cheque crossed specially more than once. Sections 128 to 131 deal with payment in due course, payment out of due course, the effect of the words "not negotiable", and the protection available to a banker receiving payment in specified circumstances.

Official Statutory Source

The current statutory text of the Negotiable Instruments Act, 1881 should be verified through India Code and the Legislative Department of the Ministry of Law and Justice. For litigation, banking compliance or formal legal interpretation, refer to the official statutory text and applicable amendments.