Section 48 of NIA : Section 48: Negotiation By Indorsement

Explanation using Example

Imagine that Sarah has a cheque that she received from her employer, which is payable to her order. Sarah needs to pay her friend Tom for a debt she owes him. Instead of cashing the cheque herself, Sarah can endorse the cheque by signing on the back of it and then deliver it to Tom. Tom can then either cash the cheque or further endorse it to someone else he owes money to. This is an application of Section 48 of The Negotiable Instruments Act, 1881, which allows for such a cheque to be transferred from one person to another through endorsement and delivery.