Report No. 11
20. Inchoate instrument.-
(1) Where one person signs and delivers to another a paper stamped in accordance with the law relating to stamp duty chargeable on instruments and either wholly blank or having written thereon an incomplete instrument, in order that it may be converted or completed into an instruments he thereby gives prima facie authority to the person who receives the paper to make or complete, as the case may be upon it an instrument, for the amount if any specified therein, or, where no amount is specified, for any amount, not exceeding in either case the amount covered by the stamp.
(2) The person so signing shall, subject to the provisions of sub-section (3), be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course, for the amount specified in the instrument or filled up therein:
Provided that no person other than a holder in due course shall receive from the person so signing the paper anything in excess of the amount intended by him to be paid thereunder.
(3) In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time and strictly in accordance with the authority given;
Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filed up within a reasonable time and strictly in accordance with the authority given.1
1. See section 20, BEA.