Negotiable Instruments Act Section 46 — Delivery
CHAPTER IV OF NEGOTIATION
General
Summary
A promissory note, bill of exchange, or cheque only becomes complete once it is handed over, either physically or in a way that counts as delivery. For the people directly involved in the transaction, the delivery must be done by the person who made, accepted, or endorsed the instrument, or by someone they authorised. However, when dealing with a holder who is not a holder in due course, it can be shown that the instrument was given only on certain conditions or for a specific purpose, not to fully transfer ownership. An instrument payable to bearer is transferred simply by handing it over, while one payable to a specific person is transferred by that person endorsing it and then handing it over.
Official Text
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.