Bills of Exchange Act, 1902
Act 11 of 1902
- Commenced on 15 April 1902
- [This is the version of this document at 1 December 1998.]
Part I – Preliminary
1. Short titleThis Act shall be known and cited as the Bills of Exchange Act, No. 11 of 1902.
2. InterpretationIn this Act, unless the context otherwise requires—"acceptance" means an acceptance completed by delivery or notification;"action" includes a counter-claim, claim in reconvention and set-off;"banker" includes a body of persons, whether incorporated or not, who carry on the business of banking;"bearer" means the person in possession of a bill or note which is payable to bearer;"bill" means bill of exchange;"cheque" means a bill of exchange drawn on a banker payable on demand;"delivery" means transfer of possession, actual or constructive, from one person to another;"holder" means the payee or endorsee 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;"month" means calendar month;"non-business days" include Sunday, and any day appointed by any law or under the authority of any law as a solemn fast or day of thanksgiving or as a public holiday;"note" means promissory note;"to note" is to make a notarial minute in accustomed form of the circumstances of dishonour, and at the time of dishonour, of a bill or note;"payment in due course" means payment made at or after the maturity of a bill to the holder thereof, in good faith and without notice that his title to the bill is defective;"value" means valuable consideration;"written" includes printed;"writing" includes print.
Part II – Bills of exchange - Form and interpretation
3. Bill of exchange defined
4. Effect where different parties to the bill are the same person
5. Address to drawee
6. Certainty required as to payee
7. What bills are negotiable
8. Sum payable
9. Bill payable on demand
10. Bill payable at a future timeA bill is payable at a determinable future time within the meaning of this Act, which is expressed to be payable—
11. Omission of date in bill payable after dateIf a bill expressed to be payable at a fixed period after date is issued undated, or if 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:Provided that—
12. Ante-dating and post-dating
13. Computation of time of paymentIf a bill is not payable on demand the day on which it falls due is determined as follows:
14. Case of need
15. Optional stipulations by drawer or indorserThe drawer of a bill and any indorser may insert therein an express stipulation—
16. Definition and requisites of acceptance
17. Time for acceptance
18. General and qualified acceptances
19. Inchoate instruments
Part III – Capacity and authority of parties
21. Capacity of parties
22. Signature essential to liabilityNo person is liable as drawer, indorser or acceptor of a bill who has not signed it as such:Provided that—
23. Forged and unauthorised signaturesSubject 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 unauthorised 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 unauthorised signature not amounting to forgery.
24. Procuration signatureA 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.
25. As agent or in representative capacity
Part IV – The consideration of a bill
26. Value and holder for value
27. Accommodation bill or party
28. Holder in due course
29. Presumption of value and good faith
Part V – Negotiation of bills
30. Negotiation of bill
31. Requisites of a valid indorsement
32. Conditional indorsementIf 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.
33. Indorsement in blank and special indorsement
34. Restrictive indorsement
35. Negotiation of overdue or dishonoured bill
36. Negotiation of bill to party already liable thereonIf a bill is negotiated back to the drawer, or to a prior indorser, or to the acceptor, such party may, subject to the provisions of this Act, re-issue 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.
37. Rights of the holderThe rights and powers of the holder of the bill are as follows:
Part VI – General duties of the holder
38. When presentment for acceptance is necessary
39. Time for presenting bill payable after sight
40. Rules as to presentment for acceptance and excuses for non-presentment
41. Non-acceptanceIf 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, and if he does not the holder shall lose his right of recourse against the drawer and indorsers.
42. Dishonour by non-acceptance and its consequences
43. Duties as to qualified acceptances
44. Rules as to presentment for payment
45. Excuses for delay or non-presentment for payment
46. Dishonour by non-payment
47. Notice of dishonour and effect of non-noticeSubject to the provisions of this Act, if 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:Provided that if—
48. Rules as to notice of dishonour
49. Excuses for non-notice and delay
50. Noting or protest of bill
51. Duties of holder as regards drawee or acceptor
Part VII – Liabilities of parties
52. Liability of drawee not automaticA 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.
53. Liability of acceptorThe acceptor of a bill by accepting it—
54. Liability of drawer or indorser
55. Stranger signing a bill liable as indorserIf 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.
56. Measure of damages against parties to dishonoured billIf a bill is dishonoured the measure of damages, which shall be deemed to be liquidated damages, shall be as follows—
57. Transferor by delivery and transferee
Part VIII – Discharge of bill
58. Payment in due course
59. Banker paying demand draft where indorsement is forgedIf a bill payable to order on demand is drawn on a banker and the banker pays the bill 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:Provided such indorsement does not purport to be that of a person who is a customer of the banker at the branch on which the said bill is drawn.
60. Acceptor the holder at maturityIf 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.
61. Discharge by renunciation
62. Discharge by cancellation
63. Alteration of bill
Part IX – Acceptance and payment for honour
64. Acceptance for honour supra protest
65. Liability of acceptor for honour
66. Presentment to acceptor for honour
67. Payment for honour supra protest
Part X – Lost instruments
68. Holder's rights to duplicate of lost bill
69. Action on lost billIn any action or proceeding upon a bill other than a proceeding for provisional sentence the court may order that the loss or non-production of the instrument shall not be set up by way of defence, provided an indemnity be given to the satisfaction of the court against the claims of any other person upon the instrument in question.
Part XI – Bill in a set
70. Rules as to set
Part XII – Conflict of laws
71. Rules where laws conflictIf 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:
Part XIII – Cheques
72. Applicability to cheques of other provisions of the ActExcept as otherwise provided in this Part the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque.
73. Presentment of cheque for payment
74. Revocation of banker's authorityThe duty and authority of a banker to pay a cheque on him by his customer are determined by—
75. General and special crossings defined
76. Crossings by drawer or after issue
77. Crossing a material part of chequeA crossing authorised by this Act is a material part of the cheque, and it shall not be lawful for any person to obliterate or except as authorised by this Act to add to or alter the crossing.
78. Duties of bankers as to crossed cheques
79. Protection to banker and drawer where cheque is crossedIf the banker on whom a crossed cheque 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 entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof.
80. Effect of crossing on holderIf 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.
81. True owner of stolen or lost crossed cheque marked "not negotiable" entitled to compensation from certain subsequent possessors
82. Sections 75 to 81 to extend to documents other than cheques crossed for like objectSections 75 to 81 inclusive shall extend to any document issued by a customer of any banker and intended to enable any person to obtain payment on demand from such banker (or from any banker if the document was issued on behalf of the Government) of the sum mentioned in such document, and shall so extend in like manner as if the said document were a cheque; and the said sections shall mutatis mutandis also extend to any document which—
Part XIV – Unindorsed or irregularly indorsed instruments
83. Effect of payment to or crediting of accounts by bankers of amounts of unindorsed or irregularly indorsed cheques and certain other documents
84. Rights of bankers if unindorsed or irregularly indorsed cheques or certain other documents are delivered to them for collectionIf a cheque, or draft or other document referred to in section 83, which is payable to order, is delivered by the holder thereof to a banker for collection, and such cheque, draft or document is not indorsed or was irregularly indorsed by such holder, such banker shall have such rights, if any, as he would have had if, upon such delivery, the holder had indorsed it in blank.
85. Evidential value of payment of unindorsed or irregularly indorsed cheques or certain other documentsIf an unindorsed or irregularly indorsed cheque or draft or other document referred to in section 83, has been paid by the banker (including a drawee referred to in sub-section (2) of the said section) on whom it is drawn, such payment shall be prima facie evidence of the receipt by the payee of the sum mentioned in such cheque, draft or document.
86. Negotiability of documents referred to in section 83, 84 and 85The provisions of sections 83, 84 and 85 shall not make negotiable any document which, apart from them, is not negotiable.[Added by P.51/1964]
Part XV – Promissory notes
87. Promissory note defined
88. Delivery necessaryA note is inchoate and incomplete until delivery thereof to the payee or bearer.
89. Joint and several notes
90. Note payable on demand
91. Presentment of note for payment
92. Liability of makerThe maker of a note by making it—
93. Application to notes of provisions relating to bills
Part XVI – Supplementary
94. Good faithA 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.
95. SignatureIf by this Act any instrument or writing is required to be signed by any person it is not necessary that he should sign it with his own hand but it is sufficient if his signature is written thereon by some other person by or under his authority, and the authorised sealing with a corporate seal of a corporation or the authorised stamping with an official stamp of any bank or company shall be deemed to be sufficient and equivalent to signature or indorsement of any such instrument or writing.
96. Computation of timeIf the reasonable or other time limited for doing any act or thing is by this Act reasonable to be less than four days, non-business days are excluded in reckoning such time.
97. When noting equivalent to protestIf a bill or note is required to be protested within a specified time or before some further proceeding is taken it is sufficient for the purpose of this Act to 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.
98. Protest when notary not accessible
99. Dividend warrants and coupon for interest may be crossedThe provisions of this Act as to crossed cheques shall apply to a warrant for payment of a dividend to a coupon for payment of interest and to postal or money orders.
100. Laws not to be affected by this ActNothing in this Act shall affect the provisions of or in any way restrict the—
History of this document
15 April 1902