Section 56 of NIA : Section 56: Indorsement For Part Of Sum Due

Explanation using Example

Imagine John holds a cheque for $1,000 and wants to pay Mike $300 from it. According to Section 56 of The Negotiable Instruments Act, 1881, John cannot simply write an endorsement on the cheque stating that Mike can claim $300 of its value. The law doesn't allow partial transfers in this way. However, if John pays $300 in cash to Mike and writes a note on the cheque that $300 has been paid, the cheque can still be used by John or someone else to whom he endorses it, but only for the remaining $700.