Can account payee cheque be transferred?

An Account Payee Cheque is a highly secured type of cheque as the amount can only be deposited in the account of the payee. The payee cannot endorse this cheque to anyone else.

How can transferability of cheque be restricted?

Addition of words ‘Not negotiable’ or ‘Account Payee only’ is necessary to restrain the negotiability of the cheque. The crossing of a cheque ensures security and protection to the holder. However, we can negotiate a crossed bearer cheque by delivery and a crossed order cheque by endorsement and delivery.

Is account payee cheque a negotiable instrument?

Cheque crossing is recognized in the Negotiable Instruments Act of 1881. Crossing a cheque means drawing two parallel transverse lines between the lines on the cheque with or without additional words such as “& CO.” or “Account Payee” or “Not Negotiable.”

What is the effect of crossing a cheque with the words a C payee only or not negotiable?

Adding a crossing to a cheque increases its security in that it cannot be cashed at a bank counter but must be paid into an account in exactly the same name as that which appears on the ‘payee’ line of the cheque (i.e. the person who has received the cheque, who is legally the “payee” and “holder” of the cheque).

What is difference between crossed cheque and account payee cheque?

To write an account payee cheque, you have to cross two lines on the left corner of the cheque and write “A/C payee only” between the two lines. Remember, if you simply cross the cheque and do not mention the words “account payee”, it will become a crossed cheque and not an account payee cheque.

Which of the following alterations are considered material alterations of a cheque?

Any alteration in the original state of a cheque such as date, amount, payee’s name, changing the word ‘order’ to bearer appearing after payee’s name or in endorsement is called material alteration.

Why is account payee written on cheque?

The reason why you issue account payee cheque in the name of the payee is because it’s safe. There are minimum chances of misuse of an account payee cheque, as the cheque can be encashed only by depositing it in the payee account.

What is cheque according to Negotiable Instruments Act?

Central Government Act. Section 6 in The Negotiable Instruments Act, 1881. 1 [ 6 “Cheque”. — A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.

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

This crossed cheque is no more a bearer cheque where anyone can negotiate and get payment across the counter. In case of a crossed cheque, the payee is free to make further endorsements. But, the A/C payee cheque cannot be further endorsed.

Is account payee cheque and crossed Cheque same?

What does a C payee on a cheque mean?

Meaning of a/c payee (only) in English The words show that the cheque must be paid only into the account of the person to whom it is written: Crossing a cheque with a/c payee means that the cheque cannot be used by someone else.

What is an a/c payee cheque?

Account Payee Cheque (A/c Payee) Account Payee Cheque, also commonly written as A/c Payee is issued when you want to redirect the amount to a specific person or entity. This means that the person/entity, whose name has been written on the cheque, can only transfer this money to their account and the money cannot be given in cash at the branch.

What is the difference between a crossed cheque and Account Payee cheque?

We generally write a Crossed Cheque or an A/c Payee on the cheque leaf to mean the same thing, but there is a difference between the two. Account Payee Cheque, also commonly written as A/c Payee is issued when you want to redirect the amount to a specific person or entity.

Can the payee of a cheque give instructions to the banker?

However, the drawer is free to provide for specific instructions regarding the payment of the cheque to the banker. “Ordinarily the payee of a cheque is entitled to encash the cheque at the counter of the paying banker by presenting it within the specified banking hours on any working day of the bank.

What is the effect of General crossing on cheque?

The effect of general crossing is that such a cheque should be presented to the paying banker by any other banker. The payee cannot present himself at the counter with a cheque crossed generally. The banker then proceeds to credit the amount of the cheque to the account of either the holder of such a cheque or the payee.