2. The word ‘endorsement’ can also be spelt
as indorsement. It is derived from the Latin
word ‘indorsum’, which means upon the
back.
3. Endorsement has been defined in sec 15 of
the Negotiable Instruments Act, 1881 as follows:
“When the maker or holder of a negotiable
instruments signs the same, for the purpose of negotiation,
on the back or face their of, or slip of paper annexed thereto
...
4. He is said to have endorsed the same and is
called the endorser”.
Generally, endorsement is made on the
backside of the instrument.
5. If the space available on the backside of
the Negotiable Instrument has been completely
covered, Apiece of paper may be attached to the
instrument and subsequent Endorsements may be
made on that paper. This paper so attached is called
allonge.
6. According to the Negotiable instruments Act,
endorsements are of the following kinds:-
Blank Endorsement Sans Frais Endorsement
Special Endorsement Faculative Endorsement
Restrictive Endorsement Partial Endorsement
Conditional Endorsement Per-Pro Endorsement
Sans –recourse Endorsement
7. i)If the endorser signs his name only, this
endorsement is called blank endorsement.
ii) It does not specify any name of endorsee.
iii) Blank endorsement is also called as “General
endorsement”.
8. iv) That instrument with blank endorsement
becomes a “Bearer instrument”. It can be
Negotiated by mere delivery.
9. i) If the endorser mentions the name of the
endorsee and put his sign, the endorsement is called
Special endorsement.
ii) Special endorsement is also called as full
endorsement.
10. Special Endorsement
iii) The instrument with full endorsement is
an order instrument.
iv) An instrument with a blank endorsement
can be converted into a special endorsement by an
holder. By Specifying the name of an endorsee and
putting his sign.
Ex: Pay to Siva
- Yogesh
11. Restrictive Endorsement
i) A Restrictive endorsement is one which limits the further
negotiation of the instrument. The endorsee in such cases can not
further endorse it.
ii) Generally, the word “Only” is added after the endorsee’s
name.
Ex; Pay to siva only
- Yogesh
12. i) Conditional endorsement is also called
as qualified endorsement.
ii) An endorsement with a condition is called
conditional endorsement. The endorsee can get the
money
Ex: Pay to siva if he marries seetha within one
month.
- Yogesh
13. Sans – Recourse Endorsement
i) Sans Recourse means without liability.
ii) Sans Recourse endorsement limits the liability of
the endorser. So this endorsement renders the endorser free
from all liability to any subsequent holder.
Ex: Pay to siva without recourse to me
- Yogesh
14. Sans Frais Endorsement
i) Sans frais means without expenses.
ii) In Sans frais endorsement the endorser accepts
his liability for the amount of the instrument, but he does
not want any additional expenses like nothing charges to
be borne by him
Ex: Pay to Siva, Without expense to me.
- Yogesh
15. Facultative endorsement
It is an endorsement whereby, the endorser waives
some of his rights on the instruments.
Ex: Pay to siva, notice of dishonour waived.
-yogesh
16. Partial endorsement
i) If only a part of the amount of the instrument is
endorsed it is called partial endorsement.
ii) Partial endorsement is not valid
Ex: A Cheque for Rs.500 is endorsed but
Pay to siva Rs.100 /- only
-Yogesh
17. Per Pro Endorsement
i) It is an endorsement made by an authorised agent of
the endorser.
ii) Prior information about the delegation of authority to
the agent must have been given to the banker. Otherwise
the banker is not legally bound to accept this type of
endosement.
