DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : P. Samba Murthy
Designation : Head of Department
Branch : D.C.C.P.
Institute : S.R.R.S. Govt. Polytechnic, Sircilla,
Karimnagar District
Year/Semester : V Semester
Subject : Banking – I
Subject Code : CCP- 504(B)
Topic : Negotiable Instrument Act.
Duration : 50 Minutes
Sub-Topic : Definition of Endorsement
Teaching Aids : PPT
CCP504(B).66 1
Objectives

On completion of this period, you would be

able to
 Further understand the essentials of a valid
endorsements.

CCP504(B).66 2
Recap

So far we have discussed

 The definition and concept of endorsement.
and essentials of a valid endorsement.
 Now let us discuss on the same topic in detail
and at length

CCP504(B).66 3
Essentials of valid endorsements/Rules
regarding endorsement are as under

 A regular endorsement implies signatures of the

holder of the negotiable instrument himself or his
duly authorized agent on its face or back for the
purpose of negotiation.
 The payee must sign his name in the exact
spellings as appearing on the negotiable
instrument.
 Endorsements in pencil or by a rubber stamp are
usually not accepted.

CCP504(B).66 4
Valid Endorsement

 Endorsements need not contain the

complimentary prefixes or suffixes.
 Endorsements do not require any particular
form of words. However, it must contain an
order to pay.
 In the case of married woman, the name of her
husband must also be mentioned in the
endorsement.

CCP504(B).66 5
Valid Endorsement

 An illiterate man can make a valid

endorsement by putting his left hand thumb
impression in the presence of certain other
person who should sign it as witness and
whose address should also be given.
 In case of joint stock companies,
associations etc., the endorsement should be
made by persons who are duly authorized to
sign on behalf of these institutions.

CCP504(B).66 6
Valid Endorsement

 Endorsement by a stranger to a negotiable

instrument i.e., by a person other than the holder,
maker or the person to whose order the bill is
payable, shall be valid.
 Such a person is known as a Backer.
 Endorsement shall be presumed to have been
made in the order in which they appear on the
instrument unless proved to the contrary.

CCP504(B).66 7
Valid Endorsement

 An express promise in writing to endorse a bill is

not an endorsement.
 Assignment of a note by a separate writing is also
not an endorsement.
 Endorsement must be completed by the delivery of
the instrument.
 It may be made by the endorser by mere signature
or by adding the name of the endorsee.

CCP504(B).66 8
Valid Endorsement

 It will be completed by the delivery of the

instrument.
 Endorsement must be genuine and not forged.

CCP504(B).66 9
Summary
 The payee must sign his name in the exact
spellings as appearing on the negotiable
instrument.
 Endorsements in pencil or by a rubber stamp are
usually not accepted.
 An illiterate man can make a valid endorsement
by putting his left hand thumb impression in the
presence of certain other person who should sign
it as witness and whose address should also be
given.
CCP504(B).66 10
Quiz

1. When the endorsement is made to a married

woman, her _______ name should be written
a) Father
b) Mother
c) Husband
d) Children

CCP504(B).66 11
Frequently asked questions

1. What is an endorsement?
2. Define the term ‘endorsement’. Explain the
requisite of a valid endorsment.
3. Describe with illustrations of various types of
endorsements.
4. Describe the essentials of a valid endorsement.

CCP504(B).66 12