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*BILLS OF EXCHANGE ACT 1949
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About this act
*BILLS OF EXCHANGE ACT 1949 is Malaysia Act, cited as Act 204 1949, currently marked in force and first recorded in 1949.
Opening note
Preamble
- An Act relating to Bills of Exchange, Cheques and Promissory Notes. [Federal Territory, Johore, Kedah, Kelantan, Negeri Sembilan, Pahang, Perak, Perlis, Selangor and Terengganu—31 December 1949, Ord. 75/1949; Malacca and Penang—1 August 1959, Ord. 30/1959; Sabah and Sarawak—1 July 1965, L.N. 260/1965]
Part I
PART I
Section 1
This Act may be cited as the Bills of Exchange Act 1949.
Section 2
Interpretation
“acceptance” means an acceptance completed by delivery or notification;
“bank holiday” and “public holiday” respectively include, as regards any
State, any day declared to be such under any written law for the time being in force in any State and includes any day (other than a Sunday) observed as a weekly holiday in any State;
“banker” includes a body of persons, whether incorporated or not, who carry on the business of banking;
“bankrupt” includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy;
10 Laws of Malaysia ACT 204
“bearer” means the person in possession of a bill or note which is payable to bearer;
“bill” means bill of exchange;
“delivery” means transfer of possession, actual or constructive, from one person to another;
“foreign currency” means any currency other than currency—
(b)
which by reason of any agreement or arrangement entered into between the Central Bank and any other monetary authority of another country, is deemed to be interchangeable with the currency of Malaysia;
“holder” means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof;
“indorsement” means an indorsement completed by delivery;
“issue” means the first delivery of a bill or note, complete in form, to a person who takes it as a holder;
“note” means promissory note;
“suit” includes action, counterclaim and set-off;
“value” means valuable consideration.
Part II
PART II
BILLS OF EXCHANGE
Form and Interpretation
Bill of exchange defined
Section 3
(2)
An instrument which does not comply with these conditions, or which orders any act to be done in addition to the payment of money, is not a bill of exchange.
(3)
An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction which gives rise to the bill, is unconditional.
(4)
A bill is not invalid by reason—
(b)
that it does not specify the value given, or that any value has been given therefor;
(c)
that it does not specify the place where it is drawn or the place where it is payable.
Inland and foreign bills
Section 4
(b)
drawn within Malaysia upon some person resident therein.
Any other bill is a foreign bill.
(2)
Unless the contrary appears on the face of the bill the holder may treat it as an inland bill.
12 Laws of Malaysia ACT 204
Effect where different parties to bill are the same person
Section 5
(2)
Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note.
Address to drawee
Section 6
(2)
A bill may be addressed to two or more drawees whether they are partners or not, but an order addressed to two drawees in the alternative or to two or more drawees in succession is not a bill of exchange.
Certainty required as to payee
Section 7
(2)
A bill may be made payable to two or more payees jointly,or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being.
(3)
Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer.
What bills are negotiable
Section 8
(2)
A negotiable bill may be payable either to order or to bearer.
Bills of Exchange 13
(3)
A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank.
(4)
A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable.
(5)
Where a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.
Sum payable
Section 9
(c)
by stated instalments, with a provision that upon default in payment of any instalment the whole shall become due;
(d)
according to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill.
(2)
Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable.
(3)
Where a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and, if the bill is undated, from the issue thereof.
Bill payable on demand
Section 10
Act, although it is required to be paid—
(a)
which is expressed to be payable on demand, or at sight, or on presentation; or
(2)
Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorsers it, be deemed a bill payable on demand.
Bill payable at a future time
Section 11
(b)
on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain.
(2)
An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect.
Omission of date in bill payable after date or acceptance after sight
Section 12
Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly:
(b)
in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date.
Bills of Exchange 15
Ante-dating and post-dating
Section 13
Provided that—
(2)
A bill is not invalid by reason only that it is ante-dated or post-dated, or that it bears date on a Sunday.
Computation of time of payment
Section 14
Where a bill is not payable on demand the day on which it falls due is determined as follows:
(a)
three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace:
Provided that—
(i)
when the last day of grace falls on a Sunday, public holiday or bank holiday;
(ii)
when the last day of grace of a bill drawn payable in a foreign currency falls on a Saturday, Sunday, public holiday or bank holiday, the bill shall be due and payable on the next succeeding business day;
(b)
where a bill is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment;
(c)
where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or protest if the bill be noted or protested for non-acceptance, or for non-delivery;
16 Laws of Malaysia ACT 204
Section 15
The drawer of a bill and any indorser may insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonoured by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he may think fit.
Section 16
Optional stipulations by drawer or indorser
The drawer of a bill, and any indorser, may insert therein an express stipulation—
(b)
waiving as regards himself some or all of the holder’s duties.
Definition and requisites of acceptance
Section 17
(2)
An acceptance is invalid unless it complies with the following conditions, namely—
(a)
it must be written on the bill and be signed by the drawee. The mere signature of the drawee without additional words is sufficient;
(b)
it must not express that the drawee will perform his promise by any other means than the payment of money.
Time for acceptance
Section 18
(b)
when it is overdue, or after it has been dishonoured by a previous refusal to accept, or by non-payment.
Date of acceptance after previous dishonor
(2)
When a bill payable after sight is dishonoured by non-acceptance, and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of first presentment to the drawee for acceptance.
General and qualified acceptances
Section 19
Bills of Exchange 17
(2)
A general acceptance assents without qualification to the order of the drawer.
(3)
(a)
A qualified acceptance in express terms varies the effect of the bill as drawn.
(i)
conditional, that is to say, which makes payment by the acceptor dependent on the fulfilment of a condition therein stated;
(ii)
partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn;
(iii)
local, that is to say, an acceptance to pay only at a particular specified place;
An acceptance, to pay at a particular place, is a general acceptance, unless it expressly states that the bill is to be paid there only, and not elsewhere;
(v)
the acceptance of some one or more of the drawees, but not of all.
Inchoate instruments
Section 20
(2)
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. Reasonable time for this purpose is a question of fact:
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 filled up within a reasonable time and strictly in accordance with the authority given.
Delivery
Section 21
(2)
As between immediate parties, and as regards a remote party other than a holder in due course, the delivery—
(a)
in order to be effectual must be made either by or under the authority of the party drawing, accepting or indorsing, as the case may be;
Bills of Exchange 19
(b)
may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill.
But if the bill be in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him so as to make them liable to him is conclusively presumed.
(3)
Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor, or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved.
Capacity and Authority of Parties
Capacity of parties
Section 22
(2)
Where a bill is drawn or indorsed by a minor or corporation having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto.
Signature essential to liability
Section 23
No person is liable as drawer, indorser, or acceptor of a bill who has not signed it as such:
(a)
where a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name;
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(b)
the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm.
Forged or unauthorized signature
Section 24
Provided that—
Subject to the provisions of this Act, where a signature on a bill is forged or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority:
Provided that nothing in this section shall affect the ratification of an unauthorized signature not amounting to a forgery.
Section 25
Procuration signatures
A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority.
Section 26
Person signing as agent or in representative capacity
(2)
In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted.
Bills of Exchange 21
The Consideration for a Bill
Value and holder for value
Section 27
(b)
an antecedent debt or liability. Such a debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time.
(2)
Where value has at any time been given for a bill the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who become parties prior to such time.
(3)
Where the holder of a bill has a lien on it arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien.
Accommodation bill or party
Section 28
(2)
An accommodation party is liable on the bill to a holder for value;
and it is immaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not.
Holder in due course
Section 29
(a)
that he became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact;
22 Laws of Malaysia ACT 204
(b)
that he took the bill in good faith and for value, and that at the time the bill was negotiated to him, he had no notice of any defect in the title of the person who negotiated it.
(2)
In particular the title of a person who negotiates a bill is defective within the meaning of this Act when he obtained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud.
(3)
A holder (whether for value or not) who derives his title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder.
Presumption of value and good faith
Section 30
(2)
Every holder of a bill is prima facie deemed to be a holder in due course; but if in an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.
Negotiation of Bills
Negotiation of bill
Section 31
(3)
A bill payable to order is negotiated by the indorsement of the holder completed by delivery.
Bills of Exchange 23
(4)
Where the holder of a bill payable to his order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferor had in the bill, and the transferee in addition acquires the right to have the indorsement of the transferor.
(5)
Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative personal liability.
Requisites of a valid indorsement
Section 32
An indorsement in order to operate as a negotiation must comply with the following conditions, namely—
(a)
it must be written on the bill itself and be signed by the indorser;
the simple signature of the indorser on the bill, without additional words, is sufficient; an indorsement written on an allonge, or on a
“copy” of a bill issued or negotiated in a country where “copies”
are recognized, is deemed to be written on the bill itself;
(b)
it must be an indorsement of the entire bill; a partial indorsement, that is to say, an indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill;
(c)
where a bill is payable to the order of two or more payees or indorsees who are not partners, all must indorse unless the one indorsing has authority to indorse for the others;
(d)
where, in a bill payable to order, the payee or indorsee is wrongly designated, or his name is misspelt, he may indorse the bill as therein described, adding, if he thinks fit, his proper signature;
(e)
where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved;
(f)
an indorsement may be made in blank or special. It may also contain terms making it restrictive.
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Conditional indorsement
Section 33
Where a bill purports to be indorsed conditionally, the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulfilled or not.
Section 34
Indorsement in blank and special indorsement
(2)
A special indorsement specifies the person to whom, or to whose order, the bill is to be payable.
(3)
The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement.
(4)
When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser’s signature a direction to pay the bill to or to the order of himself or some other person.
Restrictive indorsement
Section 35
(2)
A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorizes him to do so.
(3)
Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement.
Bills of Exchange 25
Negotiation of overdue or dishonoured bill
Section 36
(2)
Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had.
(3)
A bill payable on demand is deemed to be overdue within the meaning and for the purposes of this section, when it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact.
(4)
Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue.
(5)
Where a bill which is not overdue has been dishonoured, any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this subsection shall affect the rights of a holder in due course.
Negotiation of bill to party already liable thereon
Section 37
Where a bill is negotiated back to the drawer, or to a prior indorser or to the acceptor, such party may, subject to this Act, reissue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable.
Section 38
Rights of the holder
The rights and powers of the holder of a bill are as follows:
(b)
where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well as from mere personal defences available to prior parties among themselves, and may enforce payment against all parties liable on the bill;
(i)
if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill; and
(ii)
if he obtains payment of the bill the person who pays him in due course gets a valid discharge for the bill.
General Duties of the Holder
When presentment for acceptance is necessary
Section 39
(2)
Where a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhere than at the residence or place of business of the drawee, it must be presented for acceptance before it can be presented for payment.
(3)
In no other case is presentment for acceptance necessary in order to render liable any party to the bill.
(4)
Where the holder of a bill, drawn payable elsewhere than at the place of business or residence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused, and does not discharge the drawer and indorsers.
Time for presenting bill payable after sight
Section 40
(2)
If he does not do so, the drawer and all indorsers prior to that holder are discharged.
(3)
In determining what is reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.
Rules as to presentment for acceptance and excuses for non-presentment
Section 41
Bills of Exchange 27
(a)
the presentment must be made by or on behalf of the holder to the drawee or to some person authorized to accept or refuse acceptance on his behalf at a reasonable hour on a business day and before the bill is overdue;
(b)
where a bill is addressed to two or more drawees, who are not partners, presentment must be made to them all, unless one has authority to accept for all, then presentment may be made to him only;
(c)
where the drawee is dead, presentment may be made to his personal representative;
(d)
where the drawee is bankrupt, presentment may be made to him or to his trustee or assignee;
(e)
where authorized by agreement or usage, a presentment through the post office is sufficient.
(2)
Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance—
(a)
where the drawee is dead or bankrupt, or is a fictitious person or a person not having capacity to contract by bill;
(b)
where, after the exercise of reasonable diligence, such presentment cannot be effected;
28 Laws of Malaysia ACT 204
(c)
where, although the presentment has been irregular, acceptance has been refused on some other ground.
(3)
The fact that the holder has reason to believe that the bill, on presentment, will be dishonoured does not excuse presentment.
Non-acceptance
Section 42
When a bill is duly presented for acceptance and is not accepted within the customary time, the person presenting it must treat it as dishonoured by non-acceptance. If he does not, the holder shall lose the right of recourse against the drawer and indorsers.
Section 43
Dishonour by non-acceptance and its consequences
(a)
when it is duly presented for acceptance, and such an acceptance as is prescribed by this Act is refused or cannot be obtained; or
(2)
Subject to this Act when a bill is dishonoured by non-acceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for payment is necessary.
Duties as to qualified acceptances
Section 44
(2)
Where a qualified acceptance is taken, and the drawer or an indorser has not expressly or impliedly authorized the holder to take a qualified acceptance, or does not subsequently assent thereto, such drawer or indorser is discharged from his liability on the bill.
Bills of Exchange 29
The provisions of this subsection do not apply to a partial acceptance, whereof due notice has been given. Where a foreign bill has been accepted as to part, it must be protested as to the balance.
(3)
When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not, within a reasonable time, express his dissent to the holder, he shall be deemed to have assented thereto.
Rules as to presentment for payment
Section 45
(2)
A bill is duly presented for payment which is presented in accordance with the following rules—
(a)
where the bill is not payable on demand, presentment must be made on the day it falls due;
(b)
where the bill is payable on demand, then, subject to this Act, presentment must be made within a reasonable time after its issue in order to render the drawer liable, and within a reasonable time after its indorsement, in order to render the indorser liable; in determining what is a reasonable time, regard shall be had to the nature of the bill, the usage of trade with regard to similar bills, and the facts of the particular case;
(c)
presentment must be made by the holder or by some person authorized to receive payment on his behalf at a reasonable hour on a business day, at the proper place as hereinafter defined, either to the person designated by the bill as payer, or to some person authorized to pay or refuse payment on his behalf, if with the exercise of reasonable diligence such person can there be found;
(i)
where the place of payment is specified in the bill and the bill is there presented;
30 Laws of Malaysia ACT 204
(ii)
where no place of payment is specified, but the address of the drawee or acceptor is given in the bill, and the bill is there presented;
(iii)
where no place of payment is specific and no address given, and the bill is presented at the drawee’s or acceptor’s place of business if known, and if not, at his ordinary residence if known;
(iv)
in any other case if presented to the drawee or acceptor wherever he can be found, or if presented at his last known place of business or residence;
(e)
where a bill is presented at the proper place, and, after the exercise of reasonable diligence, no person authorized to pay or refuse payment can be found there, no further presentment to the drawee or acceptor is required;
(f)
where a bill is drawn upon, or accepted by two or more persons who are not partners, and no place of payment is specified, presentment must be made to them all;
(g)
where the drawee or acceptor of a bill is dead, and no place of payment is specified, presentment must be made to a personal representative, if such there be, and, with the exercise of reasonable diligence, he can be found;
(h)
where authorized by agreement or usage, a presentment through the post office is sufficient.
Excuses for delay or non-presentment for payment
Section 46
(2)
Presentment for payment is dispensed with—
(a)
where, after the exercise of reasonable diligence, presentment, as required by this Act cannot be effected;
Bills of Exchange 31
(c)
as regards the drawer, where the drawee or acceptor is not bound, as between himself and the drawer, to accept or pay the bill, and the drawer has no reason to believe that the bill would be paid if presented;
(d)
as regards an indorser, where the bill was accepted or made for the accommodation of that indorser, and he has no reason to expect that the bill would be paid if presented;
(3)
The fact that the holder has reason to believe that the bill will, on presentment, be dishonoured, does not dispense with the necessity for presentment.
Dishonour by non-payment
Section 47
(a)
when it is duly presented for payment and payment is refused or cannot be obtained; or
(2)
Subject to this Act, when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and indorsers accrues to the holder.
Notice of dishonour and effect of non-notice
Section 48
Subject to this Act, when a bill has been dishonoured by non-acceptance or by non-payment, notice of dishonour must be given to the drawer and each indorser, and any drawer or indorser to whom such notice is not given is discharged:
(a)
where a bill is dishonoured by non-acceptance, and notice of dishonour is not given, the rights of a holder in due course
32 Laws of Malaysia ACT 204
subsequent to the omission shall not be prejudiced by the omission;
(b)
where a bill is dishonoured by non-acceptance, and due notice of dishonour is given, it shall not be necessary to give notice of subsequent dishonour by non-payment unless the bill shall, in the meantime, have been accepted.
Rules as to notice of dishonor
Section 49
Provided that—
Notice of dishonour, in order to be valid and effectual, must be given in accordance with the following rules:
(a)
the notice must be given by or on behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill;
(b)
notice of dishonour may be given by an agent either in his own name, or in the name of any party entitled to give notice whether that party be his principal or not;
(c)
where the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior indorsers who have a right of recourse against the party to whom it is given;
(d)
where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given;
(e)
the notice may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment;
(f)
the return of a dishonoured bill to the drawer or an indorser is, in point of form, deemed a sufficient notice of dishonour;
(g)
a written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication; a misdescription of the bill shall not vitiate the
Bills of Exchange 33
notice unless the party to whom the notice is given is in fact misled thereby;
(h)
where notice of dishonour is required to be given to any person, it may be given either to the party himself, or to his agent in that behalf;
(i)
where the drawer or indorser is dead, and the party giving notice knows it, the notice must be given to a personal representative if such there be, and with the exercise of reasonable diligence he can be found;
(j)
where the drawer or indorser is bankrupt, notice may be given either to the party himself or to the trustee;
(k)
where there are two or more drawers or indorsers who are not partners, notice must be given to each of them, unless one of them has authority to receive such notice for the others;
(l)
the notice may be given as soon as the bill is dishonoured and must be given within a reasonable time thereafter; in the absence of special circumstances notice is not deemed to have been given within a reasonable time unless—
(i)
where the person giving and the person to receive notice reside in the same place, the notice is given or sent off in time to reach the latter on the day after the dishonour of the bill;
(ii)
where the person giving and the person to receive notice reside in different places, the notice is sent off on the day after the dishonour of the bill, if there be a post at a convenient hour on that day, and if there be no such post on that day, then by the next post thereafter;
(m)
where a bill when dishonoured is in the hands of an agent, he may either himself give notice to the parties liable on the bill, or he may give notice to his principal. If he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal upon receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder;
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(n)
where a party to a bill receives due notice of dishonor he has, after the receipt of such notice, the same period of time for giving notice to antecedent parties that the holder has after the dishonour;
(o)
where a notice of dishonour is duly addressed and posted, the sender is deemed to have given due notice of dishonor notwithstanding any miscarriage by the post office.
Excuses for delay in giving notice of dishonor
Section 50
(2)
Notice of dishonour is dispensed with—
(a)
when, after the exercise of reasonable diligence, notice, as required by this Act, cannot be given to or does not reach the drawer or indorser sought to be charged;
(b)
by waiver express or implied; notice of dishonour may be waived before the time of giving notice has arrived, or after the omission to give due notice;
(i)
where the drawer and drawee are the same person;
(ii)
where the drawee is a fictitious person or a person not having capacity to contract;
(iv)
where the drawee or acceptor is as between himself and the drawer under no obligation to accept or pay the bill;
(i)
where the drawee is a fictitious person or a person not having capacity to contract and the indorser was aware of the fact at the time he indorsed the bill;
(iii)
where the bill was accepted or made for his accommodation.
Noting or protest of bill
Section 51
(2)
Where a foreign bill, appearing on the face of it to be such, has been dishonoured by non-acceptance, it must be duly protested for non-acceptance, and where such a bill, which has not been previously dishonoured by non-acceptance, is dishonoured by non-payment, it must be duly protested for non-payment. If it be not so protested, the drawer and indorsers are discharged. Where a bill does not appear, on the face of it, to be a foreign bill, protest thereof in case of dishonour is unnecessary.
(3)
A bill which has been protested for non-acceptance may be subsequently protested for non-payment.
(4)
Subject to this Act, when a bill is noted or protested, it may be noted on the day of its dishonour and must be noted not later than the next succeeding business day. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.
(5)
Where the acceptor of a bill becomes bankrupt or insolvent or suspends payment before it matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.
(6)
A bill must be protested at the place where it is dishonoured:
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Provided that—
(a)
when a bill is presented through the post office, and returned by post dishonoured, it may be protested at the place to which it is returned and on the day of its return, if received during business hours, and if not received during business hours, then not later than the next business day;
(b)
when a bill drawn payable at the place of business or residence of some person other than the drawee has been dishonoured by non-acceptance, it must be protested for non-payment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary.
(7)
A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify—
(b)
the place and date of protest, the cause or reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found.
(8)
Where a bill is lost or destroyed, or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.
(9)
Protest is dispensed with by any circumstance which would dispense with notice of dishonour. Delay in noting or protesting is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence.
Duties of holder as regards drawee or acceptor
Section 52
(2)
When by the terms of a qualified acceptance presentment for payment is required, the acceptor, in the absence of an express stipulation to that
Bills of Exchange 37
effect, is not discharged by the omission to present the bill for payment on the day that it matures.
(3)
In order to render the acceptor of a bill liable, it is not necessary to protest it, or that notice of dishonour should be given to him.
(4)
Where the holder of a bill presents it for payment, he shall exhibit the bill to the person from whom he demands payment, and when a bill is paid, the holder shall forthwith deliver it up to the party paying it.
Liabilities of Parties
Funds in hands of drawee
Section 53
A bill, of itself, does not operate as an assignment of funds in the hands of the drawee available for the payment thereof, and the drawee of a bill who does not accept as required by this Act is not liable on the instrument.
Section 54
Liability of acceptor
(i)
the existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the bill;
(ii)
in the case of a bill payable to drawer’s order, the then capacity of the drawer to indorse, but not the genuineness or validity of his indorsement;
(iii)
in the case of a bill payable to the order of a third person, the existence of the payee and his then capacity to indorse, but not the genuineness or validity of his indorsement.
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Liability of drawer or indorser
Section 55
(a)
engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured, he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken;
(b)
is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.
(2)
The indorser of a bill by endorsing it—
(a)
engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured he will compensate the holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken;
(b)
is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer’s signature and all previous indorsements;
(c)
is precluded from denying to his immediate or a subsequent indorsee that the bill was, at the time of his indorsement, a valid and subsisting bill, and that he had then a good title thereto.
Stranger signing bill liable as indorser
Section 56
Where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder in due course.
Section 57
Measure of damages against parties to dishonoured bill
Where a bill is dishonoured, the measure of damages, which shall be deemed to be a liquidated amount, shall be as follows:
(a)
the holder may recover from any party liable on the bill, and the drawer who has been compelled to pay the bill may recover from the acceptor, and an indorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser—
(i)
the amount of the bill;
(ii)
interest thereon from the time of presentment for payment if the bill is payable on demand, and from the maturity of the bill in any other case;
(iii)
the expenses of noting, or, when protest is necessary, and the protest has been extended, the expenses of the protest;
(b)
in the case of a bill which has been dishonoured abroad, in lieu of the above damages, the holder may recover from the drawer or an indorser, and the drawer or an indorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange with interest thereon until the time of payment;
(c)
where by this Act interest may be recovered as damages, such interest may, if justice require it, be withheld wholly or in part, and where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper.
Transferor by delivery and transferee
Section 58
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(3)
A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee being a holder for value that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless.
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Discharge of Bill
Payment in due course
Section 59
(2)
Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but—
(a)
where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not reissue the bill;
(b)
where a bill is paid by an indorser, or where a bill payable to drawer’s order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorsements, and again negotiate the bill.
(3)
Where an accommodation bill is paid in due course by the party accommodated, the bill is discharged.
Banker paying demand draft whereon indorsement is forged
Section 60
When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bills in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.
Section 61
Acceptor the holder at maturity
When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged.
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Section 62
Express waiver or renunciation
(2)
The liabilities of any party to a bill may, in like manner, be renounced by the holder before, at, or after its maturity; but nothing in this section shall affect the rights of a holder in due course without notice of renunciation.
Cancellation
Section 63
(2)
In like manner any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged.
(3)
A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority.
Alteration of bill
Section 64
(2)
In particular the following alterations are material, namely, any alteration of date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor’s assent.
Acceptance and Payment for Honour
Acceptance for honour supra protest
Section 65
(2)
A bill may be accepted for honour for part only of the sum for which it is drawn.
(3)
An acceptance for honour supra protest in order to be valid must—
(4)
Where an acceptance for honour does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer.
(5)
Where a bill payable after sight is accepted for honour, its maturity is calculated from the date of the noting for non-acceptance, and not from the date of the acceptance for honour.
Liability of acceptor for honour
Section 66
(2)
The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has accepted.
Presentment to acceptor for honour
Section 67
(2)
Where the address of the acceptor for honour is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than the day following its maturity; and where the address of the acceptor for honour is in some place other than the place where it was protested for non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him.
(3)
Delay in presentment or non-presentment is excused by any circumstance which would excuse delay in presentment for payment or non-presentment for payment.
(4)
When a bill of exchange is dishonoured by the acceptor for honour it must be protested for non-payment by him.
Payment for honour supra protest
Section 68
(2)
Where two or more persons offer to pay a bill for the honour of different parties, the person whose payment will discharge most parties to the bill shall have the preference.
(3)
Payment for honour supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honour which may be appended to the protest or form an extension of it.
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(4)
The notarial act of honour must be founded on a declaration made by the payer for honour, or his agent in that behalf, declaring his intention to pay the bill for honour, and for whose honour he pays.
(5)
Where a bill has been paid for honour, all parties subsequent to the party for whose honour it is paid are discharged, but the payer for honour is subrogated for, and succeeds to both the rights and duties of, the holder as regards the party for whose honour he pays, and all parties liable to that party.
(6)
The payer for honour on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonour is entitled to receive both the bill itself and the protest. If the holder do not on demand deliver them up he shall be liable to the payer for honour in damages.
(7)
Where the holder of a bill refuses to receive payment supra protest, he shall lose his right of recourse against any party who would have been discharged by such payment.
Lost Instruments
Holder’s right to duplicate of lost bill
Section 69
(2)
If the drawer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so.
Suit on lost bill
Section 70
In any suit or proceeding upon a bill, the court or a judge may order that the loss of the instrument shall not be set up, provided an indemnity be given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question.
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Bill in a Set
Section 71
Rules as to sets
(2)
Where the holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed as if the said parts were separate bills.
(3)
Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is as between such holders deemed the true owner of the bill; but nothing in this subsection shall affect the rights of a person who in due course accepts or pays the part first presented to him.
(4)
The acceptance may be written on any part, and it must be written on one part only.
If the drawee accepts more than one part, and such accepted parts get into the hands of different holders in due course, he is liable on every such part as if it were a separate bill.
(5)
When the acceptor of a bill drawn in a set pays it without requiring the part bearing this acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof.
(6)
Subject to the preceding rules, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged.
Conflict of Laws
Rules where laws conflict
Section 72
Where a bill drawn in one country is negotiated, accepted or payable in another, the rights, duties and liabilities of the parties thereto are determined as follows:
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(a)
the validity of a bill as regards requisites in form is determined by the law of the place of issue, and the validity as regards requisites in form of the supervening contracts, such as acceptance, or indorsement, or acceptance supra protest, is determined by the law of the place where such contract was made:
Provided that—
(i)
where a bill is issued out of Malaysia it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue;
(ii)
where a bill, issued out of Malaysia, conforms, as regards requisites in form, to the law of Malaysia, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold or become parties to it in Malaysia;
(b)
subject to the provisions of this Act, the interpretation of the drawing, indorsement, acceptance, or acceptance supra protest of a bill, is determined by the law of the place where such contract is made:
Provided that where an inland bill is indorsed in a foreign country, the indorsement shall, as regards the payer, be interpreted according to the law of Malaysia;
(c)
the duties of the holder with respect to presentment for acceptance or payment and the necessity for or sufficiency of a protest or notice of dishonour, or otherwise, are determined by the law of the place where the act is done or the bill is dishonoured;
(d)
where the bill is drawn out of but payable in Malaysia and the sum payable is not expressed in the currency of Malaysia, the amount shall, in the absence of some express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable;
(e)
where a bill is drawn in one country and is payable in another, the due date thereof is determined according to the law of the place where it is payable.
Bills of Exchange 47
Part III
PART III
CHEQUES ON A BANKER
Cheque defined
Section 73
(2)
Except as otherwise provided in this Part, the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque.
Knowingly or negligently facilitating forgery
Section 73A
Notwithstanding section 24, where a signature on a cheque is forged or placed thereon without the authority of the person whose signature it purports to be, and that person whose signature it purports to be knowingly or negligently contributes to the forgery or the making of the unauthorized signature, the signature shall operate and shall be deemed to be the signature of the person it purports to be in favour of any person who in good faith pays the cheque or takes the cheque for value.
Section 74
Presentment of cheque for payment
(a)
where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount that he would have been, had such cheque been paid;
(b)
in determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case;
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(c)
the holder of such cheque as to which such drawer or person is discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge, and entitled to recover the amount from him.
Presentment of cheque through electronic means
Section 74A
(2)
Notwithstanding subsection (1), if at any time before payment is made, the paying bank request the collecting bank to present the cheque itself, the presentment under subsection (1) shall be disregarded, and section 74B shall not apply.
(3)
A request under subsection (2) for the presentment of cheque shall not constitute dishonour of the cheque by non-payment.
(4)
Subsection 52(4) shall not apply—
(a)
in relation to presenting a bill for payment, to presenting a cheque for payment under subsection (1); and
(b)
in relation to a bill which is paid, to a cheque which is paid following presentment under subsection (1).
(5)
For the avoidance of doubt, any payment made upon presentment in accordance with this section shall not be taken to have been made outside of the ordinary course of business, in bad faith or negligently only because it is made upon transmission of an image and the electronic payment information of the cheque rather than presentment of the cheque itself.
(6)
Where the presentment of a cheque is made under this section, the collecting bank and the paying bank shall be subject to the same duties in relation to the collection and payment of the cheque as if the cheque itself had been presented for payment.
Bills of Exchange 49
Image return document
Section 74B
(2)
Subject to subsection (4), an image return document may be presented for payment to the collecting bank by the holder to whom the image returned document was issued as if that document were the cheque to which it relates.
(3)
An image return document shall be deemed to be the cheque to which it relates for the purpose of presentment under subsection (2).
(4)
An image return document may be presented under subsection (2) for payment by the holder only if—
(a)
the collecting bank states in that document that it is valid for presentment; and
(b)
the presentment is made within six months from the date of the cheque or as specified on the cheque.
Regulations relating to cheque truncation
Section 74C
The Minister may make such regulations as may be necessary or expedient to give effect to the provisions of this Act in respect of any matters relating to cheque truncation.
Section 75
Revocation of banker’s authority
The duty and authority of a banker to pay a cheque drawn on him by his customer are determined by—
(b)
notice of the customer’s death.
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Crossed Cheques
General and special crossings defined
Section 76
(a)
the words “and company” or any abbreviation thereof between two parallel transverse lines, either with or without the words
“not negotiable”; or
(b)
two parallel transverse lines simply, either with or without the words “not negotiable”, that addition constitutes a crossing, and the cheque is crossed generally.
(2)
Where a cheque bears across its face an addition of the name of a banker, either with or without the words “not negotiable”, that addition constitutes a crossing, and the cheque is crossed specially and to that banker.
Crossing by drawer or after issue
Section 77
(4)
Where a cheque is crossed generally or specially, the holder may add the words “not negotiable”.
(5)
Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection.
(6)
Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself.
Bills of Exchange 51
Crossing a material part of cheques
Section 78
A crossing authorized by this Act is a material part of the cheque; it shall not be lawful for any person to obliterate or, except as authorized by this Act, to add to or alter the crossing.
Section 79
Duties of banker as to crossed cheques
(2)
Where the banker on whom a cheque is drawn which is so crossed nevertheless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or his agent for collection being a banker, he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid:
Provided that where a cheque is presented for payment, which does not at the time of presentment appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as authorized by this Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorized by this Act, and of payment having been made otherwise than to a banker or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be.
Protection to banker and drawer where cheque is crossed
Section 80
Where the banker, on whom a crossed cheque (including a cheque which under section 81A or otherwise is not transferable) is drawn, in good faith and without negligence pays it, if crossed generally, to a banker, and if crossed specially, to the banker to whom it is crossed, or his agent for collection, being a banker, the banker paying the cheque, and if the cheque has come into the hands of the payee, the drawer, shall respectively be
52 Laws of Malaysia ACT 204
entitled to the same rights and be placed in the same position as if payment of the cheque has been made to the true owner thereof.
Section 81
Effect of “not negotiable” crossing on holder
Where a person takes a crossed cheque which bears on it the words “not negotiable” he shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had.
Section 81A
Non-transferable cheque
(2)
For the purpose of section 80, a banker is not to be treated as having been negligent by reason only of his failure to concern himself with any purported indorsement of a cheque which under subsection (1) or otherwise is not transferable.
Special Provisions Relating to Endorsement, Etc.
Protection of bankers paying unindorsed or irregularly indorsed cheques, etc.
Section 82
(2)
Where a banker in good faith and in the ordinary course of business pays any such instrument as the following, namely:
(a)
a document issued by a customer of his which, though not a bill of exchange, is intended to enable a person to obtain payment from him of the sum mentioned in the document;
Bills of Exchange 53
(b)
a draft payable on demand drawn by him upon himself, whether payable at the head office or some other office of his bank, he does not, in doing so, incur any liability by reason only of the absence of, or irregularity in, indorsement, and the payment discharges the instrument.
Rights of bankers collecting cheques not indorsed by holders
Section 83
A banker who gives value for, or has a lien on, a cheque payable to order which the holder delivers to him for collection without indorsing it, has such
(if any) rights as he would have had if, upon delivery, the holder had indorsed it in blank.
Section 84
Unindorsed cheques as evidence of payment
An unindorsed cheque which appears to have been paid by the banker on whom it is drawn is evidence of the receipt by the payee of the sum payable by the cheque.
Section 85
Protection of bankers collecting payment of cheques, or certain other instruments
(a)
receives payment for a customer of an instrument to which this section applies; or
(b)
having credited a customer’s account with the amount of such an instrument, receives payment thereof for himself, and the customer has no title, or a defective title, to the instrument, the banker does not incur any liability to the true owner of the instrument by reason only of having received payment thereof.
(2)
This section applies to the following instruments, namely:
(a)
cheques (including cheques which under section 81A or otherwise are not transferable);
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(b)
any document issued by a customer of a banker which, though not a bill of exchange, is intended to enable a person to obtain payment from that banker of the sum mentioned in the document;
(c)
any draft payable on demand drawn by a banker upon himself, whether payable at the head office or some other office of his bank.
(3)
A banker is not to be treated for the purposes of this section as having been negligent by reason only of his failure to concern himself with absence of, or irregularity in, indorsement of an instrument.
Application of certain provisions to instruments not being bills of exchange
Section 86
(2)
Sections 74A and 74B shall, so far as applicable, have effect in relation to instruments referred to in paragraph 85(2)(b) as they have effect in relation to cheques.
(3)
Section 74A shall, so far as applicable, have effect in relation to instruments referred to in paragraph 85(2)(c) as they have effect in relation to cheques.
Saving
Section 87
The provisions of sections 82 to 86 do not make negotiable any instrument which apart from them is not negotiable.
Part IV
PART IV
PROMISSORY NOTES
Promissory note defined
Section 88
(2)
An instrument in the form of a note payable to maker’s order is not a note within the meaning of this section unless and until it is indorsed by the maker.
(3)
A note is not invalid by reason only that it contains also a pledge of collateral security with authority to sell or dispose thereof.
(4)
A note which is, or on the face of it purports to be, both made and payable within Malaysia is an inland note. Any other note is a foreign note.
Delivery necessary
Section 89
A promissory note is inchoate and incomplete until delivery thereof to the payee or bearer.
Section 90
Joint and several notes
(2)
Where a note runs “I promise to pay” and is signed by two or more persons it is deemed to be their joint and several note.
Note payable on demand
Section 91
(2)
In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particular case.
(3)
Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purpose of affecting the holder with defects of title of which
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he had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue.
Presentment of note for payment
Section 92
(2)
Presentment for payment is necessary in order to render the indorser of a note liable.
(3)
Where a note is in the body of it made payable at a particular place, presentment at that place is necessary in order to render an indorser liable;
but when a place of payment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a presentment to the maker elsewhere, if sufficient in other respects, shall also suffice.
Liability of maker
Section 93
The maker of a promissory note by making it—
(b)
is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.
Application of Part II to notes
Section 94
(2)
In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer’s order.
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(3)
The following provisions as to bills do not apply to notes, namely, provisions relating to—
Part V
PART V
SUPPLEMENTARY
Good faith
Section 95
A thing is deemed to be done in good faith, within the meaning of this
Act, where it is in fact done honestly whether it is done negligently or not.
Section 96
Signature
(2)
In the case of a corporation, where by this Act, any instrument or writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal.
But nothing in this section shall be construed as requiring the bill or note of a corporation to be under seal.
Computation of time
Section 97
(2)
“Non-business days” for the purpose of this Act mean—
Section 98
For the purposes of this Act, where a bill or note is required to be protested within a specified time or before some further proceeding is taken, it is sufficient that the bill has been noted for protest before the expiration of the specified time or the taking of the proceeding; and the formal protest may be extended at any time thereafter as of the date of the noting.
Section 99
Protest when notary not accessible
(2)
Any Magistrate acting under subsection (1) shall, as far as may be, be guided by any rules having the force of law for the time being in force which may have been promulgated for the guidance of notaries public.
(3)
The Yang di-Pertuan Agong may by notification in the Gazette prescribe the fees payable on issue of certificates under subsection (l), and may in like manner prescribe the form of such certificates.
Dividend warrants and banker’s draft may be crossed
Section 100
The provisions of this Act as to crossed cheques shall apply to a warrant for payment of dividend and to a banker’s draft.
Bills of Exchange 59
Section 101
Savings
(2)
Subject to the provisions of any written law for the time being in force, the rules of the common law of England, including the law merchant, shall, save in so far as they are inconsistent with the express provisions of this Act, apply to bills of exchange, promissory notes, and cheques.
(3)
Nothing in this Act or in any repeal effected thereby shall affect—
(a)
the provisions of any written law for the time being in force relating to revenue;
(b)
the provisions of any written law for the time being in force relating to joint stock banks or companies;
(c)
the validity of any usage relating to dividend warrants, or the indorsement thereof.
Repeal
Section 102
The Bills of Exchange Enactment of the Federated Malay States
[Cap. 56] and the Negotiable Instruments Enactment of Johore
[Johore En. No. 86] are hereby repealed.
___________________________
60
Act 204
LIST OF AMENDMENTS
Amending law
Short title
In force from
F.M. Ord. 30/1959
Bills of Exchange (Amendment
01-08-1959
and Extension) Ordinance 1959
L.N. 260/1965
Modification of Laws (Bills of
01-07-1965
Exchange) (Extension) Order 1965
P.U. (A) 431/1969
Emergency (Essential Powers)
30-10-1969
Ordinance No. 9, 1969
Bills of Exchange (Amendment)
30-04-1971
Act 1971
Bills of Exchange (Amendment)
s. 3, 01-11-1997;
Act 1998
s. 2, 4, 5 and 6,
01-07-1998
Bills of Exchange (Amendment)
01-02-2008
Act 2007
61
LAW OF MALAYSIA
Act 204
BILLS OF EXCHANGE ACT 1949\
LIST OF SECTIONS AMENDED
Section
Amending authority
In force fom
Long title
Ord. 30/1959
01-08-1959
1
Ord. 30/1959
01-08-1959
2
30-04-1971
14
30-04-1971
73A
A1012
01-11-1997
74A
01-11-1997
01-02-2008
74B
01-02-2008
74C
01-02-2008
80
01-11-1997
81A
01-11-1997
82
Ord. 30/1959
01-08-1959
82A
Ord. 30/1959
01-08-1959
82B
Ord. 30/1959
01-08-1959
82C
Ord. 30/1959
01-08-1959
82D
Ord. 30/1959
01-08-1959
82E Ord. 30/1959 01-08-1959
85 Act A1012 01-11-1997
62 Laws of Malaysia ACT 204
Section
Amending authority
In force fom
86
Act A1314 01-02-2008
92 Act A41 30-04-1971
94 Ord. 30/1959 01-08-1959
95
Ord. 30/1959 01-08-1959
Common questions
- What is BILLS OF EXCHANGE ACT 1949?
- *BILLS OF EXCHANGE ACT 1949 is Malaysia Act, cited as Act 204 1949, currently marked in force and first recorded in 1949.
- Is BILLS OF EXCHANGE ACT 1949 still in force?
- Yes — BILLS OF EXCHANGE ACT 1949 is currently in force.
- When did BILLS OF EXCHANGE ACT 1949 take effect?
- BILLS OF EXCHANGE ACT 1949 was first recorded in 1949.
- How many sections does BILLS OF EXCHANGE ACT 1949 have?
- BILLS OF EXCHANGE ACT 1949 contains 107 sections.
- Where can I read the official version of BILLS OF EXCHANGE ACT 1949?
- The official text of BILLS OF EXCHANGE ACT 1949 is published at lom.agc.gov.my.