Section 123 NI Act: Cheque crossed generally

Negotiable Instruments Act, 1881

Section 123 NI Act at a Glance

Section 123 NI Act defines when a cheque is deemed to be crossed generally. Two parallel transverse lines across a cheque's face, alone or with "and company" or any abbreviation, with or without "not negotiable", make the cheque crossed generally.

Section 123 NI Act Bare Act Text

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.

Section 123 NI Act in Simple Words

Section 123 NI Act defines when an addition across the face of a cheque is deemed a crossing and makes the cheque crossed generally. It recognises two forms of addition across the face of the cheque. First, the cheque may bear two parallel transverse lines across its face with the words "and company" or any abbreviation of those words written between the lines. Second, the cheque may bear two parallel transverse lines across its face simply, without those words.

In either case, the addition across the face of the cheque may be made with or without the words "not negotiable". When a cheque bears any of these additions across its face, Section 123 NI Act deems that addition to be a crossing and deems the cheque to be crossed generally.

When Section 123 NI Act Applies

  • The instrument is a cheque.
  • The cheque bears across its face two parallel transverse lines, either simply or with the words "and company" or any abbreviation of those words between the lines.
  • The addition is made either with or without the words "not negotiable".
  • That addition is deemed a crossing, and the cheque is deemed to be crossed generally.

Example of Section 123 NI Act

Abdul in Coimbatore draws a cheque for ₹50,000 in favour of Shreya. Before handing the cheque to Shreya, Abdul draws two parallel transverse lines across the face of the cheque without writing any words between the lines. Under Section 123 NI Act, those two parallel transverse lines across the face of the cheque are deemed a crossing, and the cheque is deemed to be crossed generally. The same legal result follows under Section 123 NI Act if Abdul writes "and company" or an abbreviation of those words between the two parallel transverse lines, with or without the words "not negotiable".

FAQs on Section 123 NI Act

What is Section 123 NI Act?▼

Section 123 NI Act defines when a cheque is deemed to be crossed generally. It states that a cheque bearing across its face two parallel transverse lines, either simply or with the words "and company" or any abbreviation thereof between the lines, with or without the words "not negotiable", is deemed to be crossed generally.

Are two parallel transverse lines alone enough for a cheque to be crossed generally under Section 123 NI Act?▼

Yes. Under Section 123 NI Act, two parallel transverse lines simply across the face of a cheque, with or without the words "not negotiable", are deemed a crossing and the cheque is deemed to be crossed generally.

Can an abbreviation of the words "and company" be used between the parallel lines under Section 123 NI Act?▼

Yes. Section 123 NI Act allows either the words "and company" or any abbreviation of those words to be written between the two parallel transverse lines across the face of the cheque.

Does adding the words "not negotiable" stop a cheque from being crossed generally under Section 123 NI Act?▼

No. Section 123 NI Act explicitly provides that the crossing may be made either with or without the words "not negotiable".

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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·