Negotiable Instruments Act Section 129 — Payment of crossed cheque out of due course

CHAPTER XIV O F CROSSED C H E Q U E S

General

Summary

If a bank pays out a cheque that has a general crossing to someone who is not a bank, or pays a specially crossed cheque to anyone other than the specific bank (or its collecting agent) named in the crossing, the bank is responsible for any loss the true owner of the cheque suffers because of that payment. In simple terms, the bank must follow the crossing instructions, and if it doesn't, it has to make good the true owner's loss.

Official Text

Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom the same is crossed, or his agent for collection, being a banker, shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid.