What is Conversion of indorsement in blank into indorsement in full? What is the Effect of indorsement? Conversion of indorsement in blank into indorsement in full and Effect of indorsement are defined under Section 49 and 50 of Negotiable Instruments Act 1881
The holder of a negotiable instrument indorsed in blank may, without signing his own name, by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank into an indorsement in full; and the holder does not thereby incur the responsibility of an indorser.
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.
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.
CHAPTER IV OF NEGOTIATION