Negotiable Instruments Act, 1881 · Chapter III: P A R T I E S T O N O T E S, B I L L S A N D C H E Q U E S .
Section 27: Agency
In plain words
A person can bind themselves or be bound through a duly authorised agent acting in their name.
- A general authority to do business and receive and discharge debts does not let an agent accept or indorse bills so as to bind the principal.
- Authority to draw bills does not by itself include authority to indorse.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
Every person capable of binding himself or of being bound, as mentioned in section 26, may so bind himself or be bound by a duly authorized agent acting in his name.
A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or indorsing bills of exchange so as to bind his principal.
An authority to draw bills of exchange does not of itself import an authority to indorse.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.
Supreme Court judgments citing the section 27
No Supreme Court judgment in our database cites this section yet.