Negotiable Instruments Act Section 47 — Negotiation by delivery

CHAPTER IV OF NEGOTIATION

General

Summary

A promissory note, bill of exchange, or cheque that is payable to the bearer can be transferred to someone else simply by handing it over. However, if the document is given with a condition that it should only take effect when a certain event happens, it cannot be transferred this way—unless the person receiving it gave value for it and had no idea about the condition, or unless that event actually occurs.

Official Text

Subject to the provisions of section 58, a promissory note, bill of exchange or cheque payable to bearer is negotiable by delivery thereof. Exception.—A promissory note, bill of exchange or cheque delivered on condition that it is not to take effect except in a certain event is not negotiable (except in the hands of a holder for value without notice of the condition) unless such event happens.