Section 55 NI Act: Conversion of indorsement in blank into indorsement in full

Negotiable Instruments Act, 1881

Section 55 NI Act at a Glance

Section 55 NI Act governs a negotiable instrument that is indorsed in full after having been indorsed in blank. The amount cannot be claimed from the indorser in full except by the indorsee in full or someone deriving title through that indorsee.

Section 55 NI Act Bare Act Text

55. Conversion of indorsement in blank into indorsement in full.

If a negotiable instrument, after having been indorsed in blank, is indorsed in full, the amount of it cannot be claimed from the indorser in full, except by the person to whom it has been indorsed in full, or by one who derives title through such person.

Section 55 NI Act in Simple Words

Section 55 NI Act sets the rule on liability when a negotiable instrument that was first indorsed in blank is later indorsed in full. Section 55 NI Act explains who can claim the amount of the instrument from a party who subsequently makes an indorsement in full on that instrument.

Under Section 55 NI Act, once the instrument is indorsed in full after an earlier indorsement in blank, no person can claim the amount of the instrument from the indorser in full unless the claimant falls into one of two categories. The claimant must either be the specific person to whom the instrument was indorsed in full, or a person who derives title through that specific indorsee.

When Section 55 NI Act Applies

  • A negotiable instrument has first been indorsed in blank.
  • The same negotiable instrument is afterwards indorsed in full.
  • The amount of the instrument cannot be claimed from the indorser in full except by the person to whom it has been indorsed in full, or by a person who derives title through that person.

Example of Section 55 NI Act

Arif in Nashik holds a negotiable instrument for ₹1,00,000 that has been indorsed in blank and transfers the instrument to Varun. Varun then indorses the instrument in full to Nandini in Varanasi, and Nandini indorses the instrument to Sanjay. Because Sanjay derives title through Nandini, the person to whom Varun indorsed the instrument in full, Sanjay can claim the ₹1,00,000 from Varun under Section 55 NI Act. Any possessor who does not hold as Nandini or derive title through Nandini cannot claim the amount of the instrument from Varun.

FAQs on Section 55 NI Act

What is Section 55 NI Act?▼

Section 55 NI Act regulates who can claim the amount of a negotiable instrument from a person who indorses the instrument in full after an earlier indorsement in blank. Under Section 55 NI Act, only the person to whom the instrument is indorsed in full, or someone deriving title through that person, can claim the amount from the indorser in full.

Who can claim the amount from the indorser in full under Section 55 NI Act?▼

Only the person to whom the instrument has been indorsed in full, or a person who derives title through that person, can claim the amount from the indorser in full.

Can a person who does not derive title through the indorsee in full claim the amount from the indorser in full under Section 55 NI Act?▼

No. Section 55 NI Act bars any claim for the amount against the indorser in full except by the person to whom the instrument was indorsed in full or someone deriving title through that person.

When does Section 55 NI Act apply to a negotiable instrument?▼

Section 55 NI Act applies when a negotiable instrument, after having been indorsed in blank, is subsequently indorsed in full.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·