BILLS OF EXCHANGE ACT 1949

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 204 BILLS OF EXCHANGE ACT 1949 As at 1 December 2011 2 BILLS OF EXCHANGE ACT 1949 First enacted ... ... ... ... … … 1949 (Ordinance No. 75 of 1949) Revised ... ... ... ... ... … … Latest amendment made by Act A1314 which came into operation on … … 1978 (Act 204 w.e.f. 29 April 1978) … … 1 February 2008 PREVIOUS REPRINT First Reprint ... ... … Second Reprint … … ... ... 2001 … … … 2006 3 LAWS OF MALAYSIA Act 204 BILLS OF EXCHANGE ACT 1949 ______________ ARRANGEMENT OF SECTIONS ______________ PART I PRELIMINARY Section 1. Short title 2. Interpretation PART II BILLS OF EXCHANGE Form and Interpretation 3. Bill of exchange defined 4. Inland and foreign bills 5. Effect where different parties to bill are the same person 6. Address to drawee 7. Certainty required as to payee 8. What bills are negotiable 9. Sum payable 10. Bill payable on demand 11. Bill payable at a future time 12. Omission of date in bill payable after date or acceptance after sight 13. Ante-dating and post-dating 4 Laws of Malaysia Section 14. Computation of time of payment 15. Case of need 16. Optional stipulations by drawer or indorser 17. Definition and requisites of acceptance 18. Time for acceptance 19. General and qualified acceptances 20. Inchoate instruments 21. Delivery Capacity and Authority of Parties 22. Capacity of parties 23. Signature essential to liability 24. Forged or unauthorized signature 25. Procuration signatures 26. Person signing as agent or in representative capacity The Consideration for a Bill 27. Value and holder for value 28. Accommodation bill or party 29. Holder in due course 30. Presumption of value and good faith Negotiation of Bills 31. Negotiation of bill 32. Requisites of a valid indorsement 33. Conditional indorsement 34. Indorsement in blank and special indorsement 35. Restrictive indorsement 36. Negotiation of overdue or dishonoured bill 37. Negotiation of bill to party already liable thereon 38. Rights of the holder ACT 204 Bills of Exchange General Duties of the Holder Section 39. When presentment for acceptance is necessary 40. Time for presenting bill payable after sight 41. Rules as to presentment for acceptance and excuses for non-presentment 42. Non-acceptance 43. Dishonour by non-acceptance and its consequences 44. Duties as to qualified acceptances 45. Rules as to presentment for payment 46. Excuses for delay or non-presentment for payment 47. Dishonour by non-payment 48. Notice of dishonour and effect of non-notice 49. Rules as to notice of dishonour 50. Excuses for delay in giving notice of dishonor 51. Noting or protest of bill 52. Duties of holder as regards drawee or acceptor Liabilities of Parties 53. Funds in hands of drawee 54. Liability of acceptor 55. Liability of drawer or indorser 56. Stranger signing bill liable as indorser 57. Measure of damages against parties to dishonoured bill 58. Transferor by delivery and transferee Discharge of Bill 59. Payment in due course 60. Banker paying demand draft whereon indorsement is forged 61. Acceptor the holder at maturity 62. Express waiver or renunciation 63. Cancellation 5 6 Laws of Malaysia Section 64. Alteration of bill Acceptance and Payment for Honour 65. Acceptance for honour supra protest 66. Liability of acceptor for honour 67. Presentment to acceptor for honour 68. Payment for honour supra protest Lost Instruments 69. Holder’s right to duplicate of lost bill 70. Suit on lost bill Bill in a Set 71. Rules as to sets Conflict of Laws 72. Rules where laws conflict PART III CHEQUES ON A BANKER 73. Cheque defined 73A. Knowingly or negligently facilitating forgery 74. Presentment of cheque for payment 74A. Presentment of cheque through document image processing system 74B. Image return document 74C. Regulations relating to cheque truncation 75. Revocation of banker’s authority ACT 204 Bills of Exchange Crossed Cheques Section 76. General and special crossings defined 77. Crossing by drawer or after issue 78. Crossing a material part of cheques 79. Duties of banker as to crossed cheques 80. Protection to banker and drawer where cheque is crossed 81. Effect of “not negotiable” crossing on holder 81A. Non-transferable cheque Special Provisions Relating to Endorsement, Etc. 82. Protection of bankers paying unindorsed or irregularly indorsed cheques etc. 83. Rights of bankers collecting cheques not indorsed by holders 84. Unindorsed cheques as evidence of payment 85. Protection of bankers collecting payment of cheques, or certain other instruments 86. Application of certain provisions to instruments not being bills of exchange 87. Saving PART IV PROMISSORY NOTES 88. Promissory note defined 89. Delivery necessary 90. Joint and several notes 91. Note payable on demand 92. Presentment of note for payment 93. Liability of maker 94. Application of Part II to notes 7 8 Laws of Malaysia PART V SUPPLEMENTARY Section 95. Good faith 96. Signature 97. Computation of time 98. When noting equivalent to protest 99. Protest when notary not accessible 100. Dividend warrants and banker’s draft may be crossed 101. Savings 102. Repeal ACT 204 9 LAWS OF MALAYSIA Act 204 BILLS OF EXCHANGE ACT 1949 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 PRELIMINARY Short title 1. This Act may be cited as the Bills of Exchange Act 1949. Interpretation 2. In this Act, unless the context otherwise requires— “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— (a) of Malaysia; or (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 BILLS OF EXCHANGE Form and Interpretation Bill of exchange defined 3. (1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to Bills of Exchange 11 whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of, a specified person, or to bearer. (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— (a) that it is not dated; (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 4. (1) An inland bill is a bill which is or on the face of it purports to be— (a) both drawn and payable within Malaysia; or (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 5. (1) A bill may be drawn payable to, or to the order of the drawer; or it may be drawn payable to, or to the order of, the drawee. (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 6. (1) The drawee must be named or otherwise indicated in a bill with reasonable certainty. (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 7. (1) Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty. (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 8. (1) When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but is not negotiable. (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 9. (1) The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid— (a) with interest; (b) by stated instalments; (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 10. (1) A bill is payable on demand— 14 Laws of Malaysia ACT 204 (a) which is expressed to be payable on demand, or at sight, or on presentation; or (b) in which no time for payment is expressed. (2) Where a