Q.13 (A). Define Endorsement.
Q.13 (B). What are the different kinds of
Endorsement?
ENDORSEMENT
The word Endorsement has been derive
from the latin word ‘’Indorsum’’ which means ‘’On the back’’. Anything written
or printed on the back of a deed or instruments is called endorsement. When the
member or holder signs his name on the negotiable instrument for the purpose of
negotiation i.e. direction to pay the amount to another person is called
Endorsement.
Section 15 of the Negotiable
Instrument Act 1881 defines Endorsement as
When the maker or holder of a
negotiable instrument sign the same, otherwise than as such maker for the
purpose of negotiation on the back or face therefore on a slip of paper or so
signs for the same purpose a stamp paper intended to be completed as a
negotiable instrument he is said to endorse the same and he is called the
endorse.
KINDS OF
ENDORSEMENT
Different kinds of Endorsement are as
follows.
1. Blank or
General Endorsement
When the endorser simply put his
signature on the back of the instrument without specifying the name of the
endorsee, it is said to be general endorsement. The holder can convert it in
full endorsement by writing the name of the payee above the signature of the
endorsee.
2. Special or
Full Endorsement
It specifies in addition to the
signature of the endorser the person to whom or to whose order the instrument
is payable.
3.
Restrictive Endorsement
An endorsement which prohibited
further negotiation of the instrument is called restrictive endorsement. For
instance if a cheque is endorsed saying “Pay A only” or “Pay A for A/C of B”
the endorsed has no power to transfer his right further.
4. Partial
Endorsement
An endorsement which makes the
transfer of the instrument from the endorser to the endorsee after the
fulfillment of stated conditions is called Partial Endorsement.
Sans Recourse
When a person wants to exclude his
liability to the endorse or any subsequent holder in case of dishonour of the
instrument. The Endorser fees himself from his liability on a negotiable
instrument by writing the words SANS RECOURSE after the name of the endorsee.
He should make it clean that he endorsee or the holder should not look to him
for payment in case of the dishonour of the instrument. The endorsee may refuse
to take an instrument with such an endorsement.
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