Chapter XIV - Of Crossed Cheques
Section 130
Section 130: Cheque bearing “not negotiable”
Section 130 prevents a transferee of a crossed cheque marked “not negotiable” from acquiring or passing a better title than the transferor had.
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Need advice on Section 130?
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
A person taking a cheque crossed generally or specially, bearing in either case the words “not negotiable,” shall not have, and shall not be capable of giving, a better title to the cheque than that which the person from whom he took it had.
Applicability and limits
The rule applies where the cheque is crossed generally or specially and bears those words. The recipient’s title is limited by the transferor’s title, and the recipient cannot pass a better one onward.
“Not negotiable” is a title restriction in this section. Do not equate it automatically with a statement that the physical cheque can never change hands or with a separate “account payee” instruction.
Hypothetical example
Hypothetical: a business receives a crossed cheque marked “not negotiable” from someone with a defective title. Section 130 prevents the business from improving that title merely by taking the cheque for value.
Evidence and decision flow
Check both the crossing and the exact words on the cheque.
Verify the transferor’s entitlement and supporting transaction records.
Assess onward transfer risk because a better title cannot be passed on.
Practical checklist
Do
- Check both the crossing and the exact words on the cheque.
- Verify the transferor’s entitlement and supporting transaction records.
- Assess onward transfer risk because a better title cannot be passed on.
Avoid
- “Not negotiable” is a title restriction in this section. Do not equate it automatically with a statement that the physical cheque can never change hands or with a separate “account payee” instruction.
Glossary
- Title
- The legal entitlement to the cheque.
- Transferor
- The person from whom the recipient takes the cheque.
Frequently asked questions
Does the restriction require a special crossing?
No. It applies to either general or special crossing bearing “not negotiable”.
Can the recipient pass a better title onward?
No. The section expressly prevents both obtaining and giving a better title.
Does taking the cheque for value erase a title defect?
It does not improve the transferor’s title under the stated section 130 rule.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026