Case Study On Crossing & Endorsement
Case Study On Crossing & Endorsement
Mr. Ganesh drawn a non-MICR cheque of Sonali Bank Savar branch in favor of Mr. Jamal. Mr. Jamal
handed over that cheque with proper endorsement to Mr. Kamal of Chittagong. Mr. Kamal deposited
that cheque to his savings account in Agrani Bank Chittagong branch for Collection. Agrani Bank
Chittagong branch send that cheque to their branch in Savar for manual collection.
Answer:
Let’s draw a complete picture before delving deep into the case. Here “Mr. Ganesh” is the Drawer of the
cheque, “Sonali Bank Savar Branch” is the Drawee and Paying Bank as well, and Mr. Jamal is the Payee
at first place. Payee will be changed with proper endorsement. In this case, Mr. Jamal and Mr. Kamal
become Payee subsequently as they are Holder in Due Course with proper endorsement. Accordingly,
Mr. Kamal becomes the final Payee who deposited the cheque to his bank i.e. Agrani Bank Chittagong
Branch for Collection. So, “Agrani Bank Chittagong Branch” is the Collecting Bank (Branch). “Agrani Bank
Chittagong Branch” sends the cheque to its agent “Agrani Bank Savar Branch” for collection. And then
“Agrani Bank Savar Branch” presents the cheque to “Sonali Bank Savar Branch” for payment. So, “Agrani
Bank Savar Branch” is the Presenting Bank here. As mentioned earlier, “Sonali Bank Savar Branch” is the
Paying Bank.
a) Now, let’s explore through the queries. Different parties may cross the cheque as follows:
1) Mr. Ganesh, the Drawer, may use simple General Crossing by drawing two parallel
transverse lines on the upper left corner of the cheque while transferring the cheque to
Mr. Jamal. He may or may not mention “& Company”, “A/c. Payee”. Mr. Jamal may
transfer the cheque to Mr. Kamal by endorsing it mentioning “Please pay to Mr. Kamal
or order”. And then Mr. Kamal may endorse it further mentioning “Please credit my
account” while depositing the cheque to his bank (Agrani Bank Chittagong Branch) i.e.
Collecting Bank for collection. In later cases, it seems only endorsement shall be
sufficient to negotiate the cheque further. However, Mr. Jamal may transfer the cheque
to Mr. Kamal by crossing (Special Crossing) it mentioning “Payee’s A/c at Agrani Bank”. A
general crossing may be converted into a special crossing by a holder by adding the
name of a banker to make the payment of the cheque safer.
2) Upon receiving the cheque from Mr. Kamal, the collecting bank, Agrani Bank Chittagong
Branch, may cross (Special Crossing) it mentioning “Agrani Bank Chittagong Branch” for
safety and send it to the presenting bank, Agrani Bank Savar Branch. While sending,
Agrani Bank Chittagong Branch may further cross it by mentioning “Agrani Bank Savar
Branch”. Such crossing is called Double Crossing, a special type of crossing. When the
banker, to whom the cheque is crossed specially, again cross it especially to another
banker, his agent, for collection is called Double Special Crossing.
b) While making payment by the paying bank i.e. Sonali Bank Savar Branch, it will check the
endorsements mentioned in the cheque to make itself satisfied about the valid transfer of the
instrument (Holder in Due Course). Different parties may endorse the cheque as follows:
1) Mr. Kamal as the depositor of the cheque may endorse it mentioning “Please credit my
account” while depositing the cheque to his bank (Agrani Bank Chittagong Branch) i.e.
Collecting Bank for collection.
2) Agrani Bank Chittagong Branch as the Collecting Bank (Branch) of the cheque may
endorse it mentioning “Payee’s account will be credited upon realization” before
sending the cheque to its agent (Agrani Bank Savar Branch) i.e. Presenting Bank.
3) The Presenting Bank (Agrani Bank Savar Branch) may endorse it mentioning “Our first
branch endorsement confirmed, Payee’s account credited upon realization”.
This is how different types of Crossing and Endorsement may be found in practice.