A “bill of exchange” is
well-defined in section 3(1) of the Bills of Exchange Act 1949 as follows;
A bill of exchange is an unconditional order in
written, addressed by one person to another, signed by the person giving it,
requiring the person to 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.
From the definition above the following is observed (Pheng and Detta ,2009);
There are three parties to a bill, viz.
the drawer, the drawee, and the payee
The bill must be an order to pay. The
order to pay must be unconditional
The bill must be writing
The bill must be addressed by one person
The bill must be signed
The bill must order payment of an amount
certain in money and not in goods or services
The bill must be payable on demand or at
fixed or determinable future time
The bill must be payable to or to the order
of a precise person or to the bearer
1.2 Negotiable Instrument
Negotiable instrument is a class of documents used in
commercial and financial transactions. They are used in domestic transaction
and international trade (Pheng and Detta, 2009).
All negotiable instrument is ‘choses in action’ (Pheng
and Detta, 2009). A chose in action is incorporeal property which
encompasses rights which might be transferred from one person to another. It is
a legal right and can be compulsory only by taking legal action in the courts.
Instrument obtain negotiability either by statute or
mercantile custom (Pheng and Detta, 2009).
Instruments negotiable by statute consist of bills of exchange, cheques, and
promissory notes. Moreover, instruments negotiable by custom comprise bank
notes, share warrants, bearer debentures, and exchequer bills.
1.2.1 Promissory Notes
Section 88(1) of the Bills of Exchange Act 1949 outlines
a promissory note as an unconditional promise in written made by one person to
another (Pheng and Detta, 2009). It is
signed by the marker, engaging to pay, on demand or at static or determinable
future time, an amount certain in money, the order of a stated person or bearer
(Cracknell, 2002). Moreover, the person
who promises to pay is known as maker and the person to whom payment is
promised is named as payee or holder.
Too add on, a promissory note may be both secured or
unsecured. Secured promissory note is the one specifies collateral securing the
amount loaned to the note maker, the borrower (Miller,
2018). Which means that the lender protects his interest within the
borrowed money with the aid of loaning cash to the maker towards the marker’s
The common utilization of promissory note is when it
is used as a security for a loan with the borrower drawing a note in favour of
the lender. In few cases, interest is added to the principal sum drawn (Pheng and Detta, 2009).
In Private Investment Company for Asia (PICA) SA v
Lorrain Esme Osman; Elders Finance Asia Ltd. Lorrain Esme Osman the plaintiff’s
action based upon a promissory note issued by the defendant and the defendant’s
failure to repay, succeeded.
Promissory note is usually negotiated in the identical
way as bills of exchange. A note which is both made and payable within Malaysia
is an inland note (Pheng and Detta, 2009).
All the other notes are foreign notes under section 88(4), Bills of Exchange
Cheques are broadly used negotiable instruments. Apart
from being a bill of exchange and thus negotiable (unless crossed ‘not
negotiable’) (Pheng and Detta, 2009).
Besides, that cheque is also an order by the customer to his banker, ordering
the latter to make payment the manner directed.
Section 73 of Bills of Exchange Act 1949 defines a
cheque as ‘a bill of exchange drawn on a banker payable on demand’ (Pheng and Detta, 2009). The combined impact of
this definition and the definition of bill of exchange furnished in Section 3
of the similar Act is that a cheque is an unconditional order in writing
addressed via a customer to his banker requiring the latter to pay on demand a
sum certain in money to, or to the order of, a specified individual or to
bearer. The two important distinguishing functions of a cheque are (Pheng and Detta, 2009):
That it must be drawn on a banker
That it must be payable on demand
Cheque may be crossed or uncrossed. A crossing creates
a direction to the drawee bank to pay the amount stated in the cheque to
another bank, or to a specific bank (Pheng and
Detta, 2009). The purpose of both types of crossing is to certify that
payment is not made in cash over the counter but to a bank.
Under Section 13(2) of The Bill of Exchange Act 1949,
a bill is not valid by reason only that is ante-dated or post-dated, or accepts
a date on a Sunday (Furmston and Chuah, 2016).
There is no stipulation in the Act as to the date on which the cheque is drawn.
However, as a cheque can become stale if left unpaid after a perverse period,
an issue provocation would be useful to help ascertain if the cheque had been
in circulation for an unduly extended time (Furmston
and Chuah, 2016).
Section 85 of the Negotiable Instruments Act states
that “where a cheque payable to order
purports to be endorsed by or on behalf of the payee the banker is discharged
by payment in due course. He can debit the account of the customer with the
amount even though the endorsement turns out subsequently to have been forged,
or the agent of the payee without authority endorsee it on behalf of the
payee”. It will be observed that the payee comprises of endorsee (Josh, 2014). The protection is accepted
because, banker cannot be expected to know the signatures of all the
individuals. So, he is only authorized to know the signatures of the own
customers (Josh, 2014).
2.0 Bid Rigging
Based on Malaysia Competition Commission bid rigging
is an agreement in a written or oral form between the bidders that limits or
reduces competition in a tender. The agreement may be between bidder that does
not really submit a bid. The bidder agrees amongst themselves who should win
the tender and at what price.
Under the Malaysian Competition Act 2010, bid rigging
is measured as hard-core cartels. As a result, Section 4(2) of the Competition
Act 2010 considers these types of agreements to have the object of meaningfully
preventing, restricting or distorting competition. This means that MyCC does
not have to verify that the agreement has an anti-competitive effect.
Bid rigging can take a variety of forms. They include;
cover bidding where the competitor will choose the winner and others, but the winner
deliberately bids above an agreed amount to establish the illusion that the winner’s
quote is competitive. Bid suppression, where competitors does not agree to tender
to ensure that the pre-agreed competitor will win the contract. Bid withdrawal,
the competition withdraws its prevailing bid in order that an agreed competitor
will be effective instead. Bid rotation the competitors agree to take turns at winning
tender, while tracking their market shares to make sure all of them have a predetermined
outcome profit. Non-conforming bids where competitors intentionally include phrases
and situations that they know will no longer be desirable to the client.