Chapter IV - Of Negotiation
Section 48
Section 48: negotiation by indorsement
Section 48 gives the transfer method for an instrument payable to order: the holder must indorse and deliver it, subject to Section 58.
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Need advice on Section 48?
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
Subject to the provisions of section 58, a promissory note, bill of exchange or cheque payable to order, is negotiable by the holder by indorsement and delivery thereof.
Applicability and limits
A holder negotiates an instrument payable to order by both indorsement and delivery, subject to Section 58.
Delivery alone is insufficient for an order instrument under this rule, and a defective title may limit the claim under Section 58.
Hypothetical example
Hypothetical: a vendor takes an order cheque from a customer but the customer has not indorsed it. The vendor completes the transfer checks before claiming negotiation.
Evidence and decision flow
Confirm the instrument is payable to order.
Verify the holder’s indorsement and delivery.
Check apparent title concerns, including Section 58.
Practical checklist
Do
- Check whether the instrument is payable to order.
- Verify the current holder’s indorsement and actual or constructive delivery.
- Examine title concerns before accepting the instrument.
Avoid
- Do not treat the instrument label alone as conclusive; check the signed wording and related statutory conditions.
Glossary
- Order instrument
- One payable to a named person or their order.
- Indorsement
- Signature for negotiation on the instrument or annexed slip.
Frequently asked questions
Is delivery alone sufficient for an order instrument?
Section 48 requires both indorsement and delivery by the holder.
Why check Section 58?
Section 48 expressly makes negotiation subject to that provision about defective title.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026