Cheques Act Cap 35 - as Plain Text by MWakili

LAWS OF KENYA CHEQUES ACT CHAPTER 35 Revised Edition 2012 [1970] Published by the National Council for Law Reporting with the Authority of the Attorney-General www.kenyalaw.org [Rev.

2012] CAP.

35 Cheques CHAPTER 35 CHEQUES ACT ARRANGEMENT OF SECTIONS Section 1.

Short title.

2.

Interpretation.

3.

Protection of collecting banker.

4.

Protection of paying banker.

5.

Saving.

6.

Amendment of section 60 of Cap.

27.

7.

Replacement of sections 82 and 83 of Cap.

27.

3 [Issue 1] [Rev.

2012] CAP.

35 Cheques CHAPTER 35 CHEQUES ACT [Date of assent: 26th June, 1968.] [Date of commencement: 28th July, 1968.] An Act of Parliament to make further provision in regard to the payment of cheques and certain other instruments [Act No.

2 of 2002.] 1.

Short title This Act may be cited as the Cheques Act.

2.

Interpretation (1) In this Act payee does not include an endorsee under a special endorsement; prescribed instrument means (a) a cheque, including a cheque which either under section 81A of the Bills of Exchange Act (Cap.

27.) or otherwise is not transferable; or (b) a document issued by a customer of a banker which is not a bill of exchange but is intended to enable a person to obtain payment from the banker of the sum of money specified in the document; or (c) a draft drawn by a banker upon himself and payable on demand at an office of his bank; or (d) any other instrument which the Minister for the time being responsible for finance may specify by notice in the Gazette.

(2) Subject to subsection (1) of this section, this Act shall be read and construed as one with the Bills of Exchange Act (Cap.27).

[Act No.

2 of 2002, Sch.] 3.

Protection of collecting banker (1) A banker who gives value for, or has a lien on, a cheque payable to order which the payee delivers to him for collection either without endorsing it or without endorsing it regularly has such rights, if any, as he would have had if upon delivery the payee had endorsed it regularly in blank.

(2) Where a banker, in good faith and without negligence and in the ordinary course of business (a) receives payment for a customer of a prescribed instrument to which the customer has no title or has a defective title; or (b) having credited the customers account with the amount of a prescribed instrument to which the customer has no title or a defective title, receives payment of the instrument for himself, the banker does not incur any liability to the true owner of the instrument by reason only of his having received payment of it; and a banker is not to be 5 [Issue 1] CAP.

35 [Rev.

2012] Cheques treated for the purposes of this subsection as having been negligent by reason only that he has failed to concern himself with the absence of, or irregularity in, endorsement of a prescribed instrument of which the customer in question appears to be the payee.

4.

Protection of paying banker (1) Where a banker, in good faith and in the ordinary course of business, pays a prescribed instrument drawn on him to a banker, he does not in doing so incur any liability by reason only of the absence of, or irregularity in, endorsement of the instrument, and (a) in the case of a cheque, he is deemed to have paid it in due course; and (b) in the case of any other prescribed instrument, the payment discharges the instrument.

(2) A prescribed instrument which is not endorsed but which appears to have been paid by the banker on whom it is drawn is evidence that the payee has been paid by the banker the sum of money specified in the instrument.

5.

Saving Nothing in this Act makes negotiable an instrument which apart from this Act is not negotiable.

6.

Amendment of section 60 of Cap.

27 Section 60(1) of the Bills of Exchange Act is amended by adding at the end thereof the words ;and in this subsection bill payable to order on demand includes a prescribed instrument within the meaning of the Cheques Act, 1968 which is payable to order 7.

Replacement of sections 82 and 83 of Cap.

27 The Bills of Exchange Act (No.

41 of 1968) is amended by substituting for sections 82 and 83 thereof a new section as follows 82.

Provisions as to crossed cheques to apply to certain other instruments The foregoing provisions of this Part relating to the crossing of cheques and crossed cheques shall apply in relation to a prescribed instrument within the meaning of the Cheques Act, 1968 (not being a cheque) as they apply to a cheque.

[Issue 1] 6.