Question

For an endorsement to be called as Restrictive Endorsement, it should satisfy which of the following condition ?

• A. The endorse signs his name only.
• B. The endorse signs a direction to pay the amount mentioned in the instrument to or to the order of a specified person.
• C. The endorser restricts or excludes the right to further negotiate the instrument..
• D. The endorser purports to transfer to the endorsee only a part of the amount payable.

Answer 1

Answer: (C)

The endorser restricts or excludes the right to further negotiate the instrument..

The term Restrictive Endorsement has been defined in section 50(2) of the Negotiable Instrument Act, 1881. An endorsement is restrictive which either-

Restricts or excludes the right to further negotiate the instrument, or

Constitutes the endorsee an agent of the endorser to endorse the instrument or to receive its contents for the endorser or for some other specified person.