Question

Cancellation of crossing is also called

• A. Marking
• B. Opening of crossing
• C. Cancellation
• D. None of the above

Hint:

Remember: Only the drawer of a cheque has the authority to "open" a crossing that they have made. This converts a crossed cheque (which must be paid through a bank account) back into an open cheque (which can be cashed at the counter).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Crossing a cheque is a direction to the paying banker to pay the money generally to a banker or to a particular banker, and not to the person at the counter. The Negotiable Instruments Act, 1881, also provides for a mechanism to cancel this crossing to enable payment at the counter.
Step 2: Detailed Explanation:
The act of cancelling the crossing on a cheque is known as opening the crossing.
This can only be done by the drawer of the cheque. The drawer can cancel the crossing by writing the words "Pay Cash" and putting his full signature on the cheque.
When the drawer opens the crossing, the cheque becomes an open or bearer cheque again, and the paying bank can make the payment over the counter to the holder.
This is a practice that has evolved through banking custom, rather than a specific provision in the Act, but it is a well-recognized procedure.
"Marking" a cheque refers to the practice of a bank certifying that the cheque is good for payment, which is now obsolete. "Cancellation" is too general a term. "Opening of crossing" is the specific technical term for this action.