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Negotiable instrument

Corporate & Other Laws

Can some one explain the meaning of section 46 of negotiable instrument act (in below image)

Sri kanaga Varshini

CA Final

★ 3K+

29-Mar-21 22:09

337

Answers (2)

This means that when the negotiable instrument is endorsed / delivered conditionally or for a special purpose, , absolute property in the instrument will not pass to the transferee, except where the transferee is holder in due course. Eg: Cheque endorsed with a condition it should not be enchased untill some event. Now, if it is encashed by any holder prior to the event, he/she will be liable to return money except if it is encashed by holder in due course.

Sahibdeep Singh

CA Inter

★ 14K+

30-Mar-21 13:23

Sahibdeep Singh

This means that when the negotiable instrument is endorsed / delivered conditionally or for a special purpose, , absolute property in the instrument will not pass to the transferee, except where the transferee is holder in due course. Eg: Cheque endorsed with a condition it should not be enchased untill some event. Now, if it is encashed by any holder prior to the event, he/she will be liable to return money except if it is encashed by holder in due course.

Thank you sir

Thread Starter

Sri kanaga Varshini

CA Final

★ 3K+

31-Mar-21 07:11

IndigoLearn

Negotiable instrument

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