Home  /  Negotiable Instruments Act  /  Section 55

Section 55: Conversion of endorsement in blank into endorsement in full

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 54 All 148 Sections of Negotiable Instruments Act Section 56

Legal Commentary & Landmark Judgments: Section 55

Section 55 governs the effect of an indorsement in full following an indorsement in blank, enacting that the instrument cannot be further negotiated except by the indorsement of the specified endorsee.

  • Restriction of Prior Blank Indorsement: Where an instrument has been indorsed in blank, but is followed by a special indorsement, it ceases to circulate by mere delivery.
  • Signature of Special Endorsee Required: No person can become a holder or negotiate the instrument without the indorsement of the person specified in the special indorsement.
  • Preservation of Prior Party Liabilities: Prior parties who signed before the special indorsement remain liable to the special endorsee.
Key Landmark Precedents:
  • Seth Loon Karan Sethiya v. Ivan E. John (1977) 1 SCC 379: Examined the interplay between successive blank and special indorsements in commercial banking law.
  • Vincent v. Horlock (1808): Affirmed that a special indorsement operates as a statutory brake upon the bearer circulation created by a previous blank indorsement.
Courtroom Practice & Strategic Litigation Guidance:

When auditing an instrument's title chain, check if an indorsement in full appears anywhere after a blank indorsement. If so, verify that the specified endorsee signed; any subsequent transfer by delivery alone without that endorsee's signature is defective.

Section 54 All 148 Sections of Negotiable Instruments Act Section 56