Chapter XIV - Of Crossed Cheques
Section 128
Section 128: Payment in due course of crossed cheque
Section 128 states the legal position of the paying banker and, conditionally, the drawer when a crossed cheque is paid in due course.
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Need advice on Section 128?
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 the banker on whom a crossed cheque is drawn has paid the same in due course, the banker paying the cheque, and (in case such cheque has come to the hands of the payee) the drawer thereof, shall respectively be entitled to the same rights, and be placed in the same position in all respects, as they would respectively be entitled to and placed in if the amount of the cheque had been paid to and received by the true owner thereof.
Applicability and limits
The threshold is payment in due course by the drawee banker. The drawer receives the stated treatment where the cheque has come to the hands of the payee.
The protection is not triggered by payment alone. Assess the section 10 payment-in-due-course conditions and the express payee-possession condition for the drawer.
Hypothetical example
Hypothetical: a crossed cheque reaches the payee and the drawee bank pays it in due course. Section 128 places the bank and qualifying drawer in the stated position as if the true owner had received payment.
Evidence and decision flow
Preserve the crossed cheque and payment records.
Assess the facts against the section 10 payment-in-due-course test.
For the drawer’s position, establish that the cheque reached the payee.
Practical checklist
Do
- Preserve the crossed cheque and payment records.
- Assess the facts against the section 10 payment-in-due-course test.
- For the drawer’s position, establish that the cheque reached the payee.
Avoid
- The protection is not triggered by payment alone. Assess the section 10 payment-in-due-course conditions and the express payee-possession condition for the drawer.
Glossary
- Payment in due course
- Payment satisfying the definition and conditions in section 10.
- True owner
- The person whose entitlement is used as the statutory comparison in section 128.
Frequently asked questions
Does every payment of a crossed cheque qualify?
No. The section requires payment in due course.
Is there an additional condition for the drawer?
Yes. The cheque must have come to the hands of the payee.
Which definition should be checked?
Section 10 supplies the Act’s definition of payment in due course.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026