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Section 125: Crossing after issue

Negotiable Instruments Act • Official Statutory Text & Practice Guide

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Act 1881
Section 124 All 148 Sections of Negotiable Instruments Act Section 126

Legal Commentary & Landmark Judgments: Section 125

Section 125 regulates crossing after issue, empowering the holder to cross an uncrossed cheque generally or specially, or to convert a general crossing into a special crossing, or to add 'not negotiable'.

  • Holder's Statutory Crossing Power: The holder may add two transverse lines to an uncrossed cheque, or insert a specific banker's name to make it specially crossed.
  • Conversion of Crossing: A general crossing may be converted into a special crossing by the holder or collecting banker.
  • Addition of 'Not Negotiable': The holder may add the words 'not negotiable' to either a general or special crossing to destroy holder in due course immunities.
Key Landmark Precedents:
  • Indian Overseas Bank v. Industrial Chain Concern (1990) 1 SCC 484: The Supreme Court recognized the statutory right of holders and collecting banks to add or enhance crossings under Section 125 to ensure safe clearance.
  • Bobbett v. Pinkett (1876): Affirmed that a crossing added by a holder under Section 125 carries the same binding legal force as if placed by the original drawer.
Courtroom Practice & Strategic Litigation Guidance:

If your client receives an open (uncrossed) bearer cheque from a debtor, advise them to immediately draw two parallel lines and write their bank's name across it under Section 125 before depositing it. This transforms it into a specially crossed cheque, preventing diversion if lost.

Section 124 All 148 Sections of Negotiable Instruments Act Section 126