Bills of Exchange Act, 1964 (Act No. 34 of 1964)Chapter ILiabilities of parties53. Liability of drawer and of indorser |
| (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 is dishonoured he will compensate the holder, or an indorser who is compelled to pay it, provided the requisite proceedings on dishonour are 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 is dishonoured he will compensate the holder, or an indorser who is compelled to pay it, provided the requisite proceedings on dishonour are 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. |