Chapter IV - Of Negotiation
Section 46
Section 46: delivery
Section 46 makes delivery central to completing an instrument and distinguishes bearer transfer from order transfer.
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Need advice on Section 46?
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
The making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by delivery, actual or constructive.
As between parties standing in immediate relation, delivery to be effectual must be made by the party making, accepting or indorsing the instrument, or by a person authorized by him in that behalf.
As between such parties and any holder of the instrument other than a holder in due course, it may be shown that the instrument was delivered conditionally or for a special purpose only, and not for the purpose of transferring absolutely the property therein.
A promissory note, bill of exchange or cheque payable to bearer is negotiable by the delivery thereof.
A promissory note, bill of exchange or cheque payable to order is negotiable by the holder by indorsement and delivery thereof.
Applicability and limits
Delivery is needed to complete the making, acceptance or indorsement of an instrument; bearer and order instruments then have different negotiation methods.
A signed instrument kept by its maker without delivery is not automatically completed, and a conditional or special-purpose delivery may limit immediate operation.
Hypothetical example
Hypothetical: a director signs a bearer note but leaves it in a draft file. The business checks whether any actual or constructive delivery occurred.
Evidence and decision flow
Identify the act of making, acceptance or indorsement.
Establish actual or constructive delivery and any condition.
Apply bearer-versus-order transfer rules.
Practical checklist
Do
- Record who delivered the instrument and whether they were authorised.
- Read bearer or order wording before determining the transfer method.
- Retain written terms if delivery was conditional or for a limited purpose.
Avoid
- Do not treat the instrument label alone as conclusive; check the signed wording and related statutory conditions.
Glossary
- Delivery
- Transfer of possession, actual or constructive, that completes the instrument act.
- Conditional delivery
- Delivery subject to a condition or special purpose between immediate parties.
Frequently asked questions
Is signature alone enough to complete an instrument?
Section 46 makes delivery necessary to complete making, acceptance or indorsement.
Are bearer and order instruments transferred alike?
No. The section distinguishes their negotiation methods.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026