Conditions of Endorsements
The section 15 of the Negotiable Instruments Act 1881Negotiable Instruments Act 1881 had been passed in 1882 and was modified in 1989 and 2002, as some more sections were added into the age ..... defines endorsing as "signing on the face or an instrument for the purpose of negotiating a negotiable instrument (such as ChequeA cheque is also a Bill of ExchangeRegulated market place where capital market products are bought and sold through intermediaries. There are 3 parties in the bill of Exchange.
BEO is a written negotiable Instrument which contains an unconditional order which is
Signed by .....
A cheque is a bill of exchange in which one party (Drawee) is a Bank. So a Drawer .....)."
Endorsing is signing in the instrument either on face or on back, for the purpose of negotiation of a NI. The person who signs is called endorser. The person in whose favor the instrument has been transferred is called Endorsee.
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The holder of the instrument endorses the instrument.
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If he signs only and does not mention anything else it is called Blank Endorsement.
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If he endorses and adds a direction to pay the amount to a specified person it is called Endorsement in full.
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If he signs and adds direction for restriction on further negotiability, then it is called Restrictive Endorsement.
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Partial endorsement is NOT valid. This means that if Suresh issues you a check of ` 10000 and endorses on the backside of the check that "Pay Ramesh ` 5000" it is NOT a Valid endorsement. Again if Suresh issues you a check of ` 10000 and endorses with a direction that " Pay Ramesh when he passes his examination", this is again NOT a valid endorsement. Both these conditions are called partial endorsements.
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A minor is NOT a valid endorser.
