Section 15 NI Act: Indorsement
Negotiable Instruments Act, 1881
Section 15 NI Act at a Glance
Section 15 NI Act defines indorsement and indorser. When the maker or holder of a negotiable instrument signs it, other than as maker, for the purpose of negotiation, that person indorses the instrument and is called the indorser.
Section 15 NI Act Bare Act Text
15. Indorsement.
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 “indorser”.
Section 15 NI Act in Simple Words
Section 15 NI Act explains when a signature on a negotiable instrument counts as an indorsement and who is called the indorser. An indorsement takes place when the maker or the holder of a negotiable instrument signs the instrument for the purpose of negotiation, provided the maker signs in a capacity other than as the maker.
Section 15 NI Act allows this signature to be placed in three ways. First, the maker or holder may sign on the back or on the face of the negotiable instrument itself. Second, the maker or holder may sign on a slip of paper annexed to the negotiable instrument. Third, for the same purpose of negotiation and otherwise than as maker, the person may sign a stamped paper that is intended to be completed as a negotiable instrument.
When the maker or holder signs in any of these ways for the purpose of negotiation, that person is said to indorse the instrument and is called the indorser.
When Section 15 NI Act Applies
- The person signing must be the maker or the holder of a negotiable instrument.
- The signature must be made otherwise than in the capacity of such maker.
- The signature must be made for the purpose of negotiation.
- The signature must be placed on the back or face of the instrument, on a slip of paper annexed to the instrument, or on a stamped paper intended to be completed as a negotiable instrument.
Example of Section 15 NI Act
FAQs on Section 15 NI Act
What is Section 15 NI Act?▼
Section 15 NI Act defines what an indorsement is and who is called an indorser under the Negotiable Instruments Act, 1881. A maker or holder who signs a negotiable instrument, a slip of paper annexed to it, or a stamped paper intended to be completed as a negotiable instrument, otherwise than as maker and for the purpose of negotiation, indorses the instrument and is called the indorser.
Where can an indorser sign a negotiable instrument under Section 15 NI Act?▼
On the back or face of the instrument, on an annexed slip of paper, or on a stamped paper intended to be completed as a negotiable instrument. Section 15 NI Act recognises a signature in any of these places as an indorsement if made otherwise than as maker for the purpose of negotiation.
Does a maker who signs a negotiable instrument as its maker become an indorser under Section 15 NI Act?▼
No. Section 15 NI Act states that the signature must be made otherwise than as such maker, for the purpose of negotiation.
Can a signature on a stamped paper that is not yet a complete negotiable instrument count as an indorsement under Section 15 NI Act?▼
Yes. Under Section 15 NI Act, if the maker or holder signs a stamped paper intended to be completed as a negotiable instrument, otherwise than as maker and for the purpose of negotiation, that person indorses the instrument and is called the indorser.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·