TYPES OF ENDORSEMENT
☑ BLANK ENDORSEMENT:
(Sec 16-1) : Signed without writing any instruction above the signature (as to whom to pay).Such cheque becomes payable to bearer u/s 54.
Blank endorsement can be converted into full by writing name of a person, to whom to pay, above the signatures.
☑ ENDORSEMENT IN FULL : Where endorser writes the name of person to whom to pay above signatures.
Instruments becomes payable to endorsee. Such endorsement followed by an endorsement in blank, makes the instrument payable to bearer.
☑ RESTRICTED ENDORSEMENT (Sec 50):
Where endorser restricts further negotiation (pay to ….. only). In this case, the endorsee can obtain payment but cannot endorse further.
☑ FACULTAT1VE: Where an endorser waives the condition of notice of dishonour
☑ SANS RECOURSE :
Where the endorser withdraws his liability by specifically writing so. (pay to X without my liability). In this case, in case of dishonour, the endorsee cannot recover from the endorser.
☑ FORGED :
When endorser’s signatures are forged. Title does not pass to any person on the basis of such endorsement and it remains with the payee or last endorsee.
A person getting a cheque after such endorsement, does not become holder as he gets no title to the cheque.
Paying bank is protected (u/s 85-1) on payment on the basis of forged endorsement if it is regular.