A bearer instruments means an instrument, the ownership in which can be transferred from one person to another by mere delivery of the instrument. The instrument can be made originally payable to the bearer or it may be made bearer subsequently by holder making a blank indorsement. The bearer character of the instrument will not be lost ever in those cases where a blank indorsement is followed by a full indorsement. The instrument continues to be transferable by mere delivery in all such cases. However, under Section-50, bearer instrument can legally be changed to an order one by a restrictive indorsement. In such a case the relations between indorser and indorsee are substantially those of principal and agent. The indorsee gets a right to receive payment of the instrument and to sue and party to the instrument that the indorser could have sued, but has no power to transfer his right to any other person unless he is expressly authorised to do so.
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