Join our Law Notes WhatsApp Group and stay updated with Legal and Judicial Updates

Section 20 of Negotiable Instruments Act, 1881

Jump to:navigation, search

Section 20 of Negotiable Instruments Act, 1881 deals with Inchoate stamped instruments.

From the Act

Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in 2[India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: provided that no person other than a holder in due course shall recover from the person delivering the instrument any thing in excess of the amount intended by him to be paid thereunder.

Related Cases / Recent Cases / Case Laws

  • Veera Exports Vs T Kaluvathy AIR 2002 SC 38: A negotiable instrument including a cheque can be re-validated.
  • V. Ramasamy Naidu Vs S.P. Damodaran 2012–3-L.W. 66
  • Crutchley vs Clarence (1813) 2 M&S 99: The right of filling up a blank or inchoate instrument may be exercised by any holder, and the first holder to whom the paper is delivered is not the only person empowered to fill in the omission.
  • Montague vs Perkins (1853) 22 LJCP 187: A blank or inchoate instrument is not valid negotiable instrument unless it is filled and till then no action is maintainable on it.
  • Gretieths vs Delton (1940) 163 LT 359; Baxandale vs Bennett (1870) 3 QBD 525: An inchoate instrument was filled in after one year. The court held it to be invalid because it was not done within a reasonable period of time.
  • H S Srinivasa vs Giriamma AIR 2006 NOC 986 Kant.: Blank instrument signed by the principal debtor and stamped, is an inchoate instrument.