Kinds of

indorsement.
Conversion of
indorsement in blank
into indorsement in
full.
Kinds of indorsement

Blank or general indorsement

Section 16 provides that when the indorser only signs
on the instrument without mentioning a specified
person in whose favour this indorsement is made is
said to be indorsement " in blank". Section 54
provides that a negotiable instrument even though
able to order becomes a bearer instrument if it is
indorsed in blank. Then it is transferable by mere
delivery. There is no difference between a bill or note
indorsed in blank and one payable to bearer. They
can both be negotiated by delivery.

Special or full indorsement

When the indorsement contains the signature of the
indorser and name of the person in whose favour the
indorsement is made, then it is indorsement in full.

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When indorsement is made by writing the words
“pay to A or A's order", followed by the signature of
the indorser, it is indorsement in full. In this kind of
indorsement it is only the indorsee who can transfer
the instrument.

Partial indorsement
Section 56 states that a partial indorsement is one
which purports to transfer to the indorsee only a part
of the amount payable on the instrument. Such
indorsement is not valid. But nothing in section 56
prohibits where such an amount has been partly
paid, a note to that effect may be indorsed on the
instrument, which may then be negotiated for the
balance.

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Restrictive indorsement
According to Section 50 the indorsement of an
instrument may contain terms making it restrictive.
Restrictive indorsement is one which by Express
words restrict or excludes the right of further
negotiation or which expresses that it is not a
complete and unconditional transfer of the
instrument but it is a mere authority to the indorsee
to receive its contents for indorser or may merely
constitute the indorsee an agent to indorse the
instrument. The indorsee acquires all the rights of the
indorser except the right of negotiation.

Conditional or qualified indorsement

Conditional indorsement is sometimes called
qualified indorsement. A condition imposed maybe a
condition precedent or a condition subsequent. It
does not affect the negotiability of the instrument.

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Section 52 provides for sans recourse or conditional
indorsement.

San recourse means without recourse, thus, if an

indorser while indorsing an instrument mentions the
words "without recourse" or "sans Recourse"
intending to exclude his liabilities then he shall not be
liable to the indorsee.

So, if the instrument is dishonoured, the subsequent

holder or the indorsee cannot look to the indorser for
payment of the same. An agent signing a negotiable
instrument may exclude his personal liability by using
words to indicate that he is signing as agent only.
The intention to exclude personal liability must be
clear. Similarly, if he makes his liability conditional
upon the happening of an event certain or uncertain,
then it is called conditional indorsement.

It is to be noted that even though negotiable

instruments must be unconditional always, however
during indorsement it is possible that an indorser

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makes his liability conditional. where an indorser
excludes his liability and afterwards becomes the
holder of the instrument all immediate indorsers are
liable to him.

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Conversion of indorsement in blank
into indorsement and full
The holder of a negotiable instrument in blank, may
without signing his own name, convert the blank
indorsement into an indorsement in full by writing
above the indorser's signature a direction to pay to or
to the order of himself or some other person, and the
holder does not thereby incur the responsibility of an
indorser.

Example:- A is the holder of a bill indorsed by B in

blank.

A writes over B’s signature the words "pay to c or

order".

A is not liable as indorser but the writing operates as

an indorsement in full from B to C.

According to Section 55 if an negotiable instrument

is indorsed in blank and is afterwards indorsed in full,

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the bill remains transferable by delivery with regard
to all parties prior to such indorsement in full. But
such indorsement in full cannot be sued by anyone
except the person in whose favour the indorsement
in full is made.

Example:- C the payee of a bill indorses it in blank

and delivers it to D, who specially endorses it to E or
order. E without indorsement transfers the bill to F. F
as the bearer is entitled to receive payment or to sue
the drawer, the accepter, or C who indorsed the bill in
blank but he cannot sue D or E.