Sections 56-57 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 56 says a writing that purports to transfer only part of the amount due on an instrument is not valid for negotiation, though a note of part payment may be indorsed and the instrument then negotiated for the balance. Section 57 says a legal representative cannot negotiate by delivery only an order instrument that the deceased indorsed but did not deliver. Both are read here as per the consolidated text consulted.
You cannot split a negotiable instrument by indorsing only a part of the amount due (section 56). If part has been paid, you may write a note of the payment on the instrument and then negotiate it for the balance. After the death of a person who indorsed an order instrument without delivering it, his legal representative cannot negotiate it by delivery only (section 57).
Section 56: indorsement for part of the sum due
The text of section 56 has two limbs.
First limb: the bar. "No writing on a negotiable instrument is valid for the purpose of negotiation if such writing purports to transfer only a part of the amount appearing to be due on the instrument."
Second limb: the allowed route. "But where such amount has been partly paid a note to that effect may be indorsed on the instrument, which may then be negotiated for the balance."
The Act spells the word "indorse"; "endorse" is the common spelling in business use. If a bank or counterparty has already refused such an instrument, you can ask for a legal consultation before taking any further step.
What the first limb means
An instrument carries one claim for one amount. An indorsement that tries to pass on only a slice of it, for example "pay Mr X Rs. 40,000" on an instrument for a larger sum, is not valid for negotiation. The section says "for the purpose of negotiation". It does not say that the writing is void for every other purpose, and the text is silent on any other effect, so this article does not supply one.
What the second limb means
The distinction the section draws is between transferring part of what appears due and recording that part has already been paid. In the second case the amount actually due has gone down. The holder may indorse a note of the part payment on the instrument, and negotiation is then for the balance. The note on the instrument is what keeps the next taker informed of the real position.
Example. Iyer Distributors holds a promissory note for a stated sum. The maker pays a part of it. Iyer Distributors writes on the back of the note that a stated amount has been received and then indorses the note to Menon Finance for the balance. Section 56 permits this. If instead Iyer Distributors wrote an indorsement passing only a stated portion of the amount still due to Menon Finance and kept the rest, section 56 says that writing is not valid for the purpose of negotiation.
| Situation | Section 56 position |
|---|---|
| Writing transfers only a part of the amount appearing due | Not valid for negotiation |
| Part has been paid; a note of the payment is indorsed on the instrument | Instrument may be negotiated for the balance |
For the effect of an ordinary indorsement, see converting a blank indorsement and the effect of indorsement.
Section 57: the legal representative and an instrument the deceased indorsed
Section 57 reads: "The legal representative of a deceased person cannot negotiate by delivery only a promissory note, bill of exchange or cheque payable to order and indorsed by the deceased but not delivered."
Break the section into its conditions:
- The person who indorsed has died.
- The instrument is a promissory note, bill of exchange or cheque.
- It is payable to order.
- The deceased had indorsed it but not delivered it.
- The legal representative tries to negotiate it by delivery only.
In that situation the section says he cannot. The reason lies in section 50, which makes indorsement followed by delivery the act that transfers property in the instrument; see negotiation by delivery and by indorsement. An indorsement without delivery has not completed a transfer, and after death the representative's delivery alone does not complete it.
The text does not say what the legal representative may do instead, for example claim payment as the person who stands in the deceased's place. Do not read more into section 57 than it states. The representative's wider powers over the deceased's assets are not addressed in the text consulted.
Example. Chawla signs the back of a cheque payable to his order, intending to hand it to a supplier next day, and dies in the night. His son, as legal representative, finds the cheque and hands it to the supplier. Under section 57 the son cannot negotiate the cheque by delivery only, because Chawla indorsed it but did not deliver it.
Practical points
- Do not try to split an instrument. If an instrument is for a larger amount and only part is to be passed on, the route in section 56 is to record part payment and negotiate for the balance, not to indorse a fraction.
- Record part payments on the instrument itself. The section speaks of a "note to that effect" indorsed on the instrument.
- Deliver on the day you indorse. Under section 57, an indorsement made but not delivered before death is a problem for the legal representative.
- Keep estate papers in order. Where a deceased person's papers include signed but undelivered instruments, the representative should not hand them over as if the indorsement were complete.
Need help with an instrument that cannot be negotiated as planned?
If a part-paid instrument or a deceased person's signed cheque is causing a problem with a bank or counterparty, a legal consultation can help you work out what the text allows and what the next step should be.
Key takeaways
- Section 56: a writing that transfers only part of the amount appearing due is not valid for negotiation.
- Where part has been paid, a note of it may be indorsed on the instrument and the instrument negotiated for the balance.
- Section 57: the legal representative of a deceased person cannot negotiate by delivery only an order instrument that the deceased indorsed but did not deliver.
- The text is silent on what a legal representative can do instead.
Read next
- Title through holder in due course and blank indorsement (sections 53-55)
- Instrument obtained by fraud or unlawful consideration (section 58)
- Negotiation by delivery and by indorsement (sections 47-48)
- Types of negotiable instruments: cheque, bill, promissory note
Disclaimer: Based on a consolidated text of the Negotiable Instruments Act, 1881 stating the position as of 26 December 2015 and on the Negotiable Instruments (Amendment) Act, 2018, as consulted on 2 October 2026. Later amendments and current criminal procedure law should be checked. This article is general information, not legal advice; check the official text before acting.