Facts of the Case
- A person holds a promissory note worth Rs. 1,000.
- The holder writes “Pay B Rs. 500” on the note.
- The note is then endorsed to B.
Issues in the Case
- Whether a partial endorsement of a negotiable instrument is valid.
- Can B claim the Rs. 500 from the promissory note as an endorsee?
- Does the Negotiable Instruments Act permit partial transfer of interest?
Principles Associated with It
- Under Section 56 of the Negotiable Instruments Act, partial endorsement of a negotiable instrument is not valid.
- The negotiable instrument must be endorsed and negotiated in full; partial endorsements are void.
- An instrument cannot be split in liability for negotiation.
Judgement
- The partial endorsement “Pay B Rs. 500” does not constitute a valid negotiation.
- B does not become the holder of the instrument in due course.
- The promissory note remains payable in full to the original holder, and B cannot enforce payment of Rs. 500 through legal means under the Act.