Types of Crossing

Types of Crossing . General Crossing . Special Crossing . General Crossing According to section of the Negotiable Instruments Act, , “Where a cheque bears across its face an addition of the words “and company” or any abbreviation thereof, between to parallel transverse lines or of two paralleltransverse 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”. The lines should be drawn across the face of a cheque and not on the reverse thereof. Further, they must by parallel and transverse. Cross marks such as ‘X’ does not constitute crossing. The words ‘and company’ or any abbreviation thereof are not an integral part of a crossing and their omission does not affect the validity of crossing. . Order of Liability The liability of the drawer of a bill is secondary. In other words, when the acceptor dishonours the bill, the liability of the drawer arises as a surety. The liability of the maker of a pronote is primary. . Bearer Instrument A bill of exchange can be drawn payable to bearer A promissory note cannot be drawn payable to bearer. . Acceptance A time bill must be accepted by the drawee. No acceptance is necessary in the case of a promissory note as it is made by the debtor himself. . No. of sets Foreign bills are drawn in sets of three. Promissory notes are not drawn so. . Conditionality A bill may be accepted conditionally. A note cannot be made conditional. . Notice of dishonour On dishonour of a bill, notice of dishonour must be given to the drawer and other endorsers. No notice of dishonour is necessary in case of a promissory note. 12th Commerce Unit - - . . AM