CANCELLATION OF BILL OF EX CHANGE. A bill of exchange is discharged when it is intentionally cancelled. The Bills of Exchange Act, 1882, Section 63, provides : " (1) Where a bill is intentionally can celled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged.
" In like manner any party liable on a bill may be discharged by the intentional cancellation of his signa ture by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is can celled, is also discharged.
" (3) A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is in operative ; but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made un intentionally, or under a mistake, or without authority." Where a bill, or cheque, has been acci dentally cancelled by a banker, a note should be made near to the cancellation that it has been " cancelled in error," and the words should be initialled. or signed, by the banker who has made such cancellation.
When a cheque is paid, it is usually cancelled by the drawer's signature being marked through with ink, and the date of payment either written or stamped upon the face of the cheque. A common method of
cancellation is to use a rubber stamp bearing the word " Paid " in bold letters and the date. Some bankers cancel by punching a few holes in the cheques.
When a bill is paid, the acceptor's signature is cancelled. In the case of a dishonoured bill, a banker usually cancels his own in dorsement.
The cancellation of a signature should be decisive, but should not make the signature illegible.
The cancellation is effected, in the case of the cheque. by the banker upon whom it is drawn, and in the case of a bill by the banker with whom the bill is domiciled.
It is usual for the paying cashier to initial all the paid cheques and bills which pass through his hands.
Where cheques are paid by one bank, under authority from another bank, the former hank sometimes cancels the drawer's signature, but the practice is not the same in all banks.
The word " cancellation " is from the Latin cavrelle, to mak • trellis, so that to cancel a document 1s literally to make trellis or lattie• work upon it. (See CANCELLED CHEOVES AND BILLS 1