Negotiable Instruments Act Section 50 — Effect of indorsement
CHAPTER IV OF NEGOTIATION
General
Summary
When a negotiable instrument is endorsed and handed over to someone, that person gets ownership of the instrument and the right to pass it on to someone else. However, the endorsement can be written in a way that limits or removes that right to pass it on. It can also be written so that the person receiving it is only an agent—authorised to endorse the instrument or collect its payment for the original holder or for another named person.
Official Text
The indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with the right of further negotiation; but the indorsement may, by express words, restrict or exclude such right, or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser, or for some other specified person.