To give still more protection to the payee of a cheque the practice of restrictive crossing is also prevalent in the business community. Such crossing can be made in both the cases of ‘general’ as well as ‘special’ crossing by adding the words ‘Account Payee’ (A/c Payee), ‘Account payee only'(A/c Payee only) or ‘Account Alok Kuchhal only.’ Thus, restrictive crossing may take any of the forms shown below.
The effect of ‘Account Payee’ crossing is that the collecting banker is supposed to credit the amount of the cheque to the Account of the payee only and nobody else. This should not be taken to mean that an ‘Account Payee’ crossed cheque cannot be negotiated further.
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ADVERTISEMENTS:
Such a cheque remains transferable, but the liability of the collecting banker is enhanced in case he credits the proceeds of a cheque so crossed to any person other than the payee and the indorsement in favour of last payee is proved forged.
The banker will be held guilty of negligence in such a case and will not be entitled to the protection given under Section 131 (where a banker acting bona fide will not be liable to the true owner, if he receives payment of a crossed cheque for a customer whose title is defective).
Thus, the collecting banker must act like a blood hound and make proper enquiries as to the title of the last indorsee (whether indorsement in his favour is genuine or not) from the original payee named in the cheque before collecting an ‘Account Payee’ crossed cheque in his {i.e., the last indorsee) account.