Section 127 NI Act: Payment of cheque crossed specially more than once

Negotiable Instruments Act, 1881

Section 127 NI Act at a Glance

Section 127 NI Act requires the banker on whom a cheque is drawn to refuse payment when the cheque is crossed specially to more than one banker. An exception applies when the second special crossing is made to an agent for collection.

Section 127 NI Act Bare Act Text

127. Payment of cheque crossed specially more than once.

Where a cheque is crossed specially to more than one banker, except when crossed to an agent for the purpose of collection, the banker on whom it is drawn shall refuse payment thereof.

Section 127 NI Act in Simple Words

Section 127 NI Act tells the banker on whom a cheque is drawn what to do when a cheque bears more than one special crossing. Under Section 127 NI Act, where a cheque is crossed specially to more than one banker, the banker on whom the cheque is drawn must refuse payment of the cheque.

Section 127 NI Act sets out one exception to this refusal rule: when the cheque is crossed to an agent for the purpose of collection. In that case, the banker on whom the cheque is drawn is not required by Section 127 NI Act to refuse payment.

When Section 127 NI Act Applies

  • A cheque is crossed specially to more than one banker.
  • The second special crossing is not to an agent for the purpose of collection.
  • The banker on whom the cheque is drawn must refuse payment of the cheque.

Example of Section 127 NI Act

Ritu in Ranchi draws a cheque for ₹60,000 on Ritu's banker in favour of Yusuf. The cheque is crossed specially across its face to two different bankers in Ranchi, and neither crossing is to an agent for the purpose of collection. When the cheque is presented for payment, Section 127 NI Act requires Ritu's banker to refuse payment of the cheque. If instead the first named banker had crossed the cheque specially to the second banker as an agent for the purpose of collection, the exception in Section 127 NI Act would apply.

FAQs on Section 127 NI Act

What is Section 127 NI Act?▼

Section 127 NI Act directs the banker on whom a cheque is drawn to refuse payment when the cheque is crossed specially to more than one banker. It makes an exception where the cheque is crossed to an agent for the purpose of collection.

Must a banker refuse payment if a cheque is crossed specially to two independent bankers under Section 127 NI Act?▼

Yes. Under Section 127 NI Act, where a cheque is crossed specially to more than one banker, the banker on whom it is drawn must refuse payment unless it is crossed to an agent for the purpose of collection.

When is a cheque crossed specially to more than one banker payable under Section 127 NI Act?▼

When it is crossed to an agent for the purpose of collection. Section 127 NI Act excepts that case from the duty to refuse payment.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

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