crossed cheque/Account payee cheque

This query is : Resolved 

26 May 2008

What is the difference between crossed cheque and account payee cheque?

Because there is a modification u/s 40A(3) for payment made more than 20000/- from crossed cheque to account payee cheque.

CA. Yayati Tyagi (Expert)
26 May 2008

crossed cheque : two parallel lines are made in corner of cheque. it can be endorsed in fovour of any other person. e.g. A issued crossed cheque in the name of B. now, B can endorse this cheque in favour of C by writing and signing on its back and C can get money into his a/c even cheque is in name of B.

a/c payee : in between those parralel lines, "account payee" is also written. in above example, if cheque is a/c payee, B cannot endorse in favour of any other person. money will go into B's a/c only.

R.V.RAO (Expert)
26 May 2008


Shyam Lal Naik (Expert)
26 May 2008

Crossed Cheque = Cheque is to be collected by a banker only.

A/c Payee Crossing = Proceeds must credited to the bank a/c of the payee.

A/c payee crosing does not restrict negotiability. It can still be transfered by endorsement and delivery.

Only if the cheque is crossed as "Not Negotiable", the cheque can not be further transfered.

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