The indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with the right of further negotiation; but the indorsement may, by express words, restrict or exclude such right, or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser, or for some other specified person.
Illustrations
B signs the following indorsements on different negotiable instruments payable to bearer.--
(a) "Pay the contents to C only".
(b) "Pay C for my use."
(c) "Pay C or order for the account of B."
(d) "the within must be credited to C."
These indorsements exclude the right of further negotiation by C.
(e) "Pay C."
(f) "Pay C value in account with the Oriental Bank."
(g) "Pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others."
These indorsements do not exclude the right of further negotiation by C.
Illustrations
B signs the following indorsements on different negotiable instruments payable to bearer.--
(a) "Pay the contents to C only".
(b) "Pay C for my use."
(c) "Pay C or order for the account of B."
(d) "the within must be credited to C."
These indorsements exclude the right of further negotiation by C.
(e) "Pay C."
(f) "Pay C value in account with the Oriental Bank."
(g) "Pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others."
These indorsements do not exclude the right of further negotiation by C.
India Code, Government of India. Text fetched 09 Oct 2026. Source metadata reports last modification: 2018-04-16. Check the linked official text and subsequent notifications when applying a provision.