Endorsement refers to signing one's name on the back of a negotiable instrument like a cheque in order to transfer ownership to another person. There are several types of endorsements - blank or general endorsement allows further negotiation by delivery, special or full endorsement specifies the next endorsee, and restrictive, conditional, sans recourse, facultative, and sans frais endorsements modify the endorser's liability. A valid endorsement must be made in ink, on the instrument, by a holder or maker of the instrument through their signature, and completed through delivery. Endorsement allows the transfer of rights, guarantees prior signatures, and makes the endorser liable if the instrument is dishonored.

2. INTRODUCTION :
Endorsement and delivery is a mode of negotiating
a negotiable instruments like cheque. A negotiable
instrument like cheque payable to order (i.e.,
payable to specified person or his order) can be
negotiated only by endorsement and delivery.
So, it is necessary to have some idea about
endorsement.

3. Meaning Of Endorsement :
The term “Endorsement” or “indorsement” is
derived from the Latin term “in dorsum” which
means “on the back”. So, endorsement means
signing one’s name on the back of a negotiable
instrument, say, a cheque , with a view to
transferring the interest, right, property or title
in the instrument to anther person.

4. Section 15 of The Negotiable Instruments
Act, 1881 defines endorsement as
When the maker or holder of a negotiable
instrument signs the same, otherwise than as
such maker, for the purpose of negotiation, on
the back or face thereof or on a slip of paper
annexed thereto, or so signs for the same
purpose a stamped paper intended to be
completed as a negotiable instrument, he is
said to indorse the same, and is called the
“endorser”.

5. Parties:
1)Endorser:
The person who endorses the instrument(i.e., the person who
signs his name on the back of the instrument for the purpose of
transferring its property to another) is called the “endorser”.
2) Endorsee:
The person to whom the instrument is endorsed is called the
“endorsee”

6. Who Can Endorse An Instrument:
As per Sec 51 of The Negotiable Instruments Act, a
negotiable instrument can be endorsed by any one of
the following persons:
a) The payee of the instrument.(the first endorsement of
an instrument is made by the payee.)
b) The holder of a negotiable instrument.
c) The endorsee of the instrument.
In short, the first endorsement of negotiable instrument can
be made by the payee. Subsequent endorsements may
be made by person who becomes the holder thereof.

7. Where Can Endorsement Be Made:
The law permits an endorsement to be made on the back or
on the face of an instrument. However, it’s desirable to
make the endorsement on the back of the instrument in
keeping with the time-honoured practice. In case the
back of the instrument is fully covered with endorsement
because of its passing through many hands, further
endorsements can be made on a separate slip of paper
attached to the instrument. The separate slip of paper
attached to the instrument for the purpose of
endorsement is called an “allonge”. It must be noted that,
if an allonge is used, the first endorsement on the allonge
must be partly on the allonge. This is necessary in order
to prevent the separation of the allonge from one
instrument and its attachment to another instrument.

8. Effects Of Endorsement:
When a negotiable instrument is endorsed and delivered by
the endorser to the endorsee, he (endorser) creates certain
legal consequences. They are:
1. He transfers his right, interest, property or title in the
instrument to the endorsee.
2. He certifies the genuineness of the instrument.
3. He also certifies that all prior endorsement are genuine.
4. He guarantees to the endorsee that he had good title to the
instrument.
5. Endorsement conveys to the endorsee the right of further
negotiation.
6. He undertakes to compensate every subsequent holder of
the instrument in case of dishonour or non payment of the
instrument which is presented strictly in accordance with its
tenor.(It should be noted that the endorser’s liability to the
subsequent endorsees is that of a surety. But to the
immediate endorsee, he is also liable as a principal debtor).

9. Kinds Of Endorsements:
1. Blank or general endorsement
2. Endorsement in full or special
endorsement
3. Restrictive Endorsement
4. Conditional Endorsement
5. Sans Recourse Endorsement
6. Facultative Endorsement
7. Sans Frais Endorsement

10. 1.Blank or General Endorsement:
A blank endorsement is an endorsement in which
the endorser merely signs his name on the back
of the instrument without mentioning the name
of the person to whom the instrument is
endorsed.
When the cheque is endorsed in bank, it becomes
a bearer instrument, even if it was originally
made payable to order. As a bearer instrument it
can be negotiated (i.e., transferred) further by
merely delivery.

12. 2. Endorsement in full or special endorsement:
If the endorser, in addition to his signature, also adds a
direction to pay the amount mentioned in the instrument
to, or to the order of, a specified person the
endorsement is said to be in full [Sec. 16(1)].
When a cheque is endorsed in full, it can be negotiated
further only by the endorsee named in the
endorsement.

13. aadiadildm

14. 3.Restrictive endorsement:
An endorsement which, by express words, prohibits the
endorsee from further negotiating the instrument or
restricts the endorsee to deal with his instrument as
directed by the endorser is called ‘restrictive’
endorsement.
The endorsee under a restrictive endorsement gets all the
rights of an endorser except the right of further
negotiation. In other words, such an endorsement
entitles the endorsee to receive the payment on due date
and sue the parties for it but he cannot further negotiate
the instrument.

15. Mr. Y Only
adildm

16. 4.Conditional endorsement:
A conditional endorsement is an endorsement in which the
endorser makes his liability on the instrument or the right
of the endorsee to receive the payment of the instrument
depend upon the happening of a specified event.
When an instrument bears a conditional endorsement, the
liability of the endorser will arise, or the property in the
instrument will pass to the endorsee only if the specified
event takes place or if the particular condition is fulfilled.

17. Pay Mr. A or Order on the arrival of Mr. S
at New Mangaluru Port by 23.Dec.2016
(sd.) adildm

18. 5. Sans Recourse Endorsement (Sec. 52):
When the endorser expressly excludes his own liability on
the negotiable instrument to the endorsee or any
subsequent holder in case of dishonour of the
instrument, the endorsement is known as ‘sans recourse’
endorsement.
Such an endorsement is generally made by adding the
words ‘sans recourse’ or ‘without recourse.’
Thus, “Pay X or order sans recourse” or “Pay X without
recourse to me” or “Pay X or order at his own risk” is
examples of this type of endorsement.

19. Mr. C or Order, Sans Recourse.
adildm

20. 6.Facultative endorsement:
Generally, the endorser of an instrument is entitled to
receive a notice of dishonour from the holder in case
dishonour of the instrument, if he is to be held liable on
the instrument. If he is not served with the notice of
dishonour, he will not be liable to the holder. But, in the
case of facultative endorsement, the endorser waives or
surrenders his right to receive the notice of dishonour by
writing the words “Notice Of Dishonour Waived”, after
writing the name of the endorsee.
When an instrument bears a facultative endorsement, the
endorser will be liable on the instrument in case of
dishonour, even if he is not given any notice of
dishonour.

21. Mr. D or Order. Notice Of Dishonour Waived
adildm

22. 7. Sans Frais Endorsement:
A sans frais endorsement is an endorsement
in which, by writing the words “Sans
Frais”(without expense), the endorser
makes it clear that no one should incur any
expenses on his/her account in respect of
the negotiable instrument.

23. Mr. M or Order, Sans Frais
adildm

24. Essentials Of Valid Endorsement:
1. It is better that endorsement is made in Ink.
2. It must be on the instrument.
3. It must be made by the maker or holder of the instrument.
4. It must be signed by the endorser.
5. It must be completed by delivery of the instrument.
6. It should be in the form of ordinary signature of the payee
or the endorsee.
7. Title of honour should be omitted.
8. It must be an endorsement of the entire bill.
9. In case of illiterate, a thumb impression should be fixed.
10. If the number of payee are more then one then all the
payees will sign or that person who is authorized.

25. thank you