Chapter XIV - Of Crossed Cheques
Section 127
Section 127: Payment of cheque crossed specially more than once
Section 127 requires refusal of payment where a cheque has multiple special crossings outside the collection-agent exception.
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Need advice on Section 127?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where a cheque is crossed specially to more than one banker, except when crossed to an agent for the purpose of collection, the banker on whom it is drawn shall refuse payment thereof.
Applicability and limits
The drawee bank must examine multiple named bankers in special crossings. The section states a refusal rule but excepts a crossing to an agent for collection.
Not every appearance of a second banker triggers refusal: the agency exception matters. Conversely, a second unrelated special crossing should not be treated as harmless.
Hypothetical example
Hypothetical: a cheque names two separate bankers in special crossings with no collection-agency relationship established. Section 127 directs the drawee to refuse payment.
Evidence and decision flow
Identify each special crossing and named banker.
Determine whether the extra crossing is to an agent for collection.
Record the basis for payment handling or refusal without assuming an agency relationship.
Practical checklist
Do
- Identify each special crossing and named banker.
- Determine whether the extra crossing is to an agent for collection.
- Record the basis for payment handling or refusal without assuming an agency relationship.
Avoid
- Not every appearance of a second banker triggers refusal: the agency exception matters. Conversely, a second unrelated special crossing should not be treated as harmless.
Glossary
- Multiple special crossings
- Special crossings naming more than one banker.
- Collection exception
- The exception for crossing to an agent for collection.
Frequently asked questions
Is refusal discretionary under the stated rule?
The section says the drawee banker shall refuse payment when its conditions are met.
Is a collection-agent crossing excepted?
Yes. The statutory exception is for an agent for the purpose of collection.
Should agency simply be assumed?
No. Establish the collection relationship before relying on that exception.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026