General Rules regarding the Form of Endorsements :
An endorsement must be regular and valid in order to be effective. The appropriateness or otherwise of a particular form of endorsement depends upon the practice amongst the bankers. The following rules are usually followed in this regard.
1. Signature of the endorser. The signature on the document for the purpose of endorsement must be that of the endorser or any other person who is duly authorized to endorse on his behalf. If a cheque is payable to two persons, both of them should sign their names in their own handwriting. If the endorser signs in block letters, it will not be considered a regular endorsement.
2. Spelling. The endorser should spell his name in the same way as his name appears on the cheque or bill as its payee or endorsee. If his name is mis-spelt or his designation has been given incorrectly, he should sign the instrument in the same manner as given in the instrument. Thereafter, he may also put his proper signature in the same handwriting, if he likes to do so. For example, if the payee’s name is wrongly spelt as ‘Virendra Perkash’ instead of ‘Virendra Prakash’ regular endorsement will be as follows:
Virendra Prakash
Merely writing the correct name will not be regular endorsement.
3. No addition or omission of initial of the name. An initial name should neither be an added nor omitted from the name of the payee or endorsee as given in the cheque. For example, a cheque is payable to S.C. Gupta should not be endorsed as S. Gupta or vice versa. Similarly, a cheque payable to Harish Saxena should not be endorsed as H. Saxena because it will be doubtful for the paying banker to ascertain that H. Saxena is Harish Saxena and nobody else. It is possible that some Hari Saxena has signed on the cheque as H. Saxena.
4. Prefixes and suffixes to be excluded. The prefixes and suffixes to the names of the payee or endorsee need not be included in the endorsement. For example, the words “Mr., Messrs, Mrs., Miss, Shri, Shrimati, Lala, Babu, General, Dr., Major, etc.” need not be given by the endorser otherwise the endorsement will not be regular. However, an endorser may indicate has title or rank, etc., after his signature. For example, a cheque payable to Mojor Raja Ram or Dr. Laxmi Chandra may be endorsed as ‘Raja Ram, Major’ or Laxmi Chandra, M.D.’ A cheque payable to Padmashri Vishnu Kant may be endorsed as Vishnu Kant, Padmashri.