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CMA Intermediate · Business Laws and Ethics · Negotiable Instruments Act, 1881

Which of the following indorsements by B, on an instrument payable to bearer, does NOT exclude the indorsee C's right of further negotiation, as per the illustrations to Section 50?

"Pay C value in account with the Oriental Bank" does not exclude further negotiation. The Section 50 illustrations list this form, along with "Pay C", as non-restrictive, whereas "for my use", "for the account of B" and "must be credited to C" exclude C's further negotiation.

  1. A"Pay C value in account with the Oriental Bank"Correct
  2. B"Pay C for my use"
  3. C"Pay C or order for the account of B"
  4. D"The within must be credited to C"

Explanation

Illustration (f) states that "Pay C value in account with the Oriental Bank" does not exclude further negotiation. The other three, illustrations (b), (c) and (d), are listed as excluding C's right of further negotiation.

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