Chapter II - Of Notes, Bills and Cheques
Section 20
Section 20: Incomplete stamped instruments
Section 20 addresses authority and liability where a person signs and delivers a properly stamped blank or incomplete paper intended for completion as a negotiable instrument.
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Need advice on Section 20?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
Key rule and applicability
Signing and delivery create prima facie completion authority, within the amount covered by the stamp. The signer’s liability to a holder in due course is stated by the provision, while a person other than a holder in due course cannot recover more than the amount the delivering person intended to be paid.
Limits and related provisions
Both signing and delivery, the stamping condition and the person’s actual capacity matter. This is not a general licence to fill in any blank cheque or fabricate obligations, and prima facie authority is not the same as an irrebuttable finding of every disputed fact.
Hypothetical business example
Hypothetical: a business hands over a signed, properly stamped incomplete instrument with a stated intended amount. A later claim requires examination of delivery, stamp coverage, completion, claimant status and the intended-amount limitation applicable to a non-holder-in-due-course claimant.
Practical decision flow
Preserve the stamped paper, signature and delivery evidence.
Record the intended amount and the amount covered by the stamp.
Assess completion authority and the claimant’s holder-in-due-course status before calculating any recoverable amount.
Practical checklist
Do
- Preserve the stamped paper, signature and delivery evidence.
- Record the intended amount and the amount covered by the stamp.
- Assess completion authority and the claimant’s holder-in-due-course status before calculating any recoverable amount.
Avoid
- Both signing and delivery, the stamping condition and the person’s actual capacity matter. This is not a general licence to fill in any blank cheque or fabricate obligations, and prima facie authority is not the same as an irrebuttable finding of every disputed fact.
Glossary
- Prima facie authority
- The completion authority stated to arise on the specified facts, subject to the applicable proof process.
- Stamp coverage
- The monetary limit covered by the stamp referred to in the section.
Frequently asked questions
Does signature alone reproduce all conditions?
No. The section also requires delivery and the specified stamping and incomplete-paper setting.
Can a non-holder-in-due-course claimant exceed the intended amount?
The proviso expressly prevents recovery beyond the amount intended by the person delivering the instrument.
Is this a universal rule for filling any blank payment document?
No. Apply its specific instrument, stamping, delivery and claimant conditions.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026