Payment through Crossed Cheque
When the payment is made through the cheque, the cheque either us non crossed or bearer cheque or crossed cheque. The following are the crossed cheque kinds and the procedure of the payment under the Negotiable Instruments Act 1881.
1. Payment of Cheque crossed Generally
Under section 126 of the Negotiable Instrument Act 1881 where cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker.
2. Payment of Cheque crossed Specially
Where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker whom it is crossed or his agent for collection.
3. Payment of Cheque Crossed Specially More than Once
Where a cheque is crossed specially to more than once banker, except when crossed to an agent for the purpose of collection the banker on whom it is drawn shall refuse payment thereof.
4. Payment in Due Course of Crossed Cheque
Under section 128 of the Negotiable Instrument Act 1881 where a banker on whom a crossed chque is drawn in good faith and without negligence pays, it if crossed generally to a banker and if crossed specially to the banker whom it is crossed or his agent for collection being a banker the banker paying the cheque and in case such cheque has come to the hands of the payee the drawer thereof shall respectively be entitled to the same right and be placed in the same position in all respects as they would respectively be entitled to and placed in if the amount of the chque had been paid to and received by the true owner thereof.
5. Payment of crossed cheque out of due course
Under section 129 of the Negotiable Instrument Act 1881 Any banker paying a cheque crossed generally otherwise than to the banker or a cheque crossed specially otherwise than to the banker to whom the same is crossed or his agent for collection being a banker shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid.