Proc. No. 11 of 1902.

Dishonour by nonpayment.

Notice of dishonour

notice.

has no reason to expect that the bill would be paid if presented.

(e) By waiver of presentment, express or implied.

(f) Where the drawee or acceptor is insolvent, or has assigned his estate.

45. (1) A bill is dishonoured by non-payment

(a) When it is duly presented for payment and payment is refused or cannot be obtained; or

(b) When presentment is excused and the bill is overdue and unpaid.

(2) Subject to the provisions of this Proclamation, when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and endorsers accrues to the holder.

46. Subject to the provisions of this Proclamation, when a and effect of non- 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

Rules as to notice of dishonour.

(1) Where a bill is dishonoured by non-acceptance and notice of dishonour is not given, the rights of a holder in due course, subsequent to the omission, shall not be prejudiced by the omission.

(2) Where a bill is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by nonpayment, unless the bill shall in the meantime have been accepted.

47. Notice of dishonour, in order to be valid and effectual, must be given in accordance with the following rules :

:

(1) The notice must be given by or on behalf of the holder, or by or on behalf of the indorser, who at the time of giving it is himself liable on the bill.

(2) 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.

(3) 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.

(4) Where notice is given by or on behalf of an indorser
entitled to give notice, as herein before provided, it
enures for the benefit of the holder and all indorsers
subsequent to the party to whom notice is given.
(5) 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-pay-
ment.

(6) The return of a dishonoured bill to the drawer or an indorser is in point of form deemed a sufficient notice of dishonour.

(7) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A mis-description of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.

(8) 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.

(9) Where the drawer or indorser is dead and the party giving notice knows it, the notice must be given to an executor, if such there be, and with the exercise of reasonable diligence he can be found.

(10) Where the drawer or indorser is insolvent, notice may be given either to the person himself or to the person in whom his estate is by law vested.

(11) 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.

(12) The notice may be given as soon as the bill is dis-
honoured, 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-

(a) Where the person giving and the person to
receive notice reside in different places, the notice
is given or sent off in time to reach the latter on
the day after the dishonour of the bill.
(b) Where the person giving and the person to
receive notice reside in different places, the notice
is sent off on the business day next after the
dishonour of the bill if there be a post at a con-
venient hour on that day; and if there be no
such post on that day then by the next post
thereafter.

(43) 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 give 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.

(44) Where a party to a bill receives due notice of dishonour, he has after the receipt of such notice the same period of time for giving notice to antecedent parties that the holder has after dishonour.

Proc. No. 11 of 1902.

Proc. No. 11 of 1902.

Excuses for non

notice and delay.

Noting or protest of bill.

(15) Where a notice of dishonour is duly addressed and posted, the sender is deemed to have given due notice of dishonour notwithstanding any miscarriage by the Post Office.

48. (1) Delay in giving notice of dishonour is excused where the delay is caused by circumstances beyond the control of the party giving notice and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate the notice must be given with reasonable diligence. (2) Notice of dishonour is dispensed with

(a) When after the exercise of reasonable diligence notice
as required by this Proclamation cannot be given to
or does not reach the drawer or indorser sought to be
charged.

(b) By waiver expressed or implied. Notice of dishonour
may
be waived before the time of giving notice has
arrived, or after the omission to give due notice.
(c) As regards the drawer in the following cases namely—
(1) Where drawer and drawee are the same person.
(2) Where the drawee is a fictitious person or a
person not having capacity to contract.

(3) Where the drawer is the person to whom the
bill is presented for payment.

(4) Where the drawee or acceptor is as between himself and the drawer under no obligation to accept or pay the bill.

(5) Where the drawer has countermanded payment. (d) As regards the indorser in the following cases, namely(1) 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.

(2) Where the indorser is the person to whom the bill is presented for payment.

(3) Where the bill was accepted or made for his accommodation.

49. (1) Where a bill has been dishonoured by nonacceptance, it must be duly protested for non-acceptance, and where a bill which has not been previously dishonoured by nonacceptance 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, with the exception of the drawer or payee of a cheque on a banker as hereinafter defined. (2) A bill which has been protested for non-acceptance may be subsequently protested for non-payment.

(3) Subject to the provisious of this Proclamation, when a bill is noted or protested it must be noted on the day of its dishonour. When a bill has been duly noted the protest may be subsequently extended as of the date of the noting.

(4) Where the acceptor of a bill becomes insolvent or assigns his estate or suspends payment before it matures the holder may cause the bill to be protested for better security against the drawer and indorsers.

(5) A bill must be protested at the place where it is dishonoured Provided that

*(a) When a bill is protested 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,if protested, 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. (6) A protest must contain a copy of the bill and must be signed by the Notary making it, and must specify :—

(a) The person at whose request the bill is protested;
(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.

(7) 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.

(8) 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, when necessary, with reasonable diligence.

Proc. No. 11 of 1902.

Duties of holder

acceptor.

50. (1) When a bill is accepted generally presentment for payment is not necessary in order to render the acceptor liable, as regards drawee or (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 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 a 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.

The word "protested" where it occurs the first time in this sub-section is a clerical error in the Proclamation as originally gazetted. It should read "presented." (See Correction of Errors in Laws Ordinance 1904.")

Proc. No. 11 of 1902.

Funds in hand of

drawee.

Liability of acceptor.

Liability of drawer or indorser.

Stranger signing a

bill liable as indorser.

LIABILITIES OF PARTIES.

51. 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 Proclamation is not liable on the instrument.

52. The acceptor of a bill by accepting it

(1) Engages that he will pay it according to the tenor of his acceptance;

(2) Is precluded from denying to a holder in due course-
(a) The existence of the drawer, the genuineness of
his signature and his capacity and authority to
draw the bill;

(b) 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;
(c) 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 the validity of his endorsement.

53. (1) The drawer of a bill by drawing it—

(a) Engages that on due presentment it shall be accepted
and paid according to its tenor, and that if it be dis-
honoured 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 indorsing 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 sub-
sequent 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.

54. Where a person signs a bill otherwise than as drawer or acceptor he or she thereby incurs the liabilities of an indorser to a holder in due course.