Notes and Articles for Law students

User Tools

Site Tools


Presentment for acceptance

Section 61 of the Negotiable Instruments Act,1881.

A bill of exchange payable after sight must, if no time or place is specified therein for presentment, be presented to the drawee thereof for acceptance, if he can, after reasonable search, be found, by a person entitled to demand acceptance, within a reasonable time after it is drawn, and in business hours on a business day. In default of such presentment, no party thereto is liable thereon to the person making such default.

If the drawee cannot, after reasonable search, be found, the bill is dishonoured.

If the bill is directed to the drawee at a particular place, it must be presented at that place; and if at the due date for presentment he cannot, after reasonable search, be found there, the bill is dishonoured.

Where authorized by agreement or usage, a presentment through the post office by means of a registered letter is sufficient.

The last paragraph of the section was added by section 4 of the NI Act, 18851). The section deals with presentment of bills payable after sight for acceptance. Presentment means that the bill should be exhibited i.e, placed before and shown to the drawee so that he may judge for himself whether he will accept it or not , mere notice of the existence of the bill is not sufficient to constitute presentment. Under section 63 the drawee is entitled to 48 hours time, exclusive of public holidays, to consider whether he will accept. In the absence of a contract to the contrary, the rule for presentation, embodied in this section applies to hundis as well. Under the general law, there is no specific time within which a hundi payable at sight, or payable on arrival at a particular place is to be presented. This section repeats the law as it was before.

It is only a bill payable after sight or payable after a certain time after acceptance that must be presented for acceptance, otherwise, in the absence of proof of presentment, no claim can succeed. Similarly, there may be a stipulation in the bill requiring payment without acceptance. As regards bills payable on demand or bills payable on a fixed date eg 60 days after date or on the date of a certain event happening presentation is not compulsory but optional with the holder, but it would be advisable in all cases to present the bill for the acceptance of the drawee so that the liability may be fixed on the drawee, as the holder by presenting it to the drawee can either get his acceptance which means an additional security to the bill or, in case of non-acceptance, proceed against the drawer and the other prior parties.

Time for presentation

In a case of compulsory presentation it must be made within a reasonable time i.e, without undue delay. There can be no hard and fast rule as to what period will constitute reasonable time in all cases. It will depend on the circumstances of each particular case on the lines laid down in section 105. In considering the question whether a bill has been presented within a reasonable time regard should be had to the situation and interest of both the drawer and the payee and to the distance of the place where the instrument is drawn from that where it is to be accepted and the course of dealings regarding similar instrument. If, after the holder had taken the bill, the exchange fell he would be justified in not presenting it till the market rose to protect himself from the loss, unless, of course, low exchange was a permanent and regular course of the market. In the latter case he would have to present it with due diligence.

Therefore, where a hundi was drawn in Calcutta upon a firm at Joypur made payable upon arrival there and the hundi reached Joypur on the 5th April but was not presented for payment until the 29th of the month when it was dishonoured, and soon after the drawee's firm became insolvent, it was held that the hundi was presented within reasonable time and the delay did not absolve the drawer from liability. But where the time for presentation is specified it must be presented on the specified date. In optional cases it may be circulated and presented at any time. But if instead of circulating, the holder locks it up for a long time he is guilty of laches. It may, however, be noted that the earlier the presentation the better, as delay may be attended, on the part of the drawer, with the risk of insolvency of the drawee on whom the order for payment has been made by the drawer as the latter has funds with, the former. In all cases the presentation must be made on a business day and at business hours which are between 10 am and 5 pm on week days and between 10 am and 2 pm on Sundays.

Place of presentment

The bill is to be presented to the drawee usually at his place of residence or business unless a specified place is mentioned in the bill for presentment. If a place is distinctly specified it must be presented at that place Bills which are to be present at a named place are known as 'domiciled bills'.

Proof of presentment

Where the presentment of a bill is compulsory, presentment should be definitely proved in order to enable a party to base his claim on it. In the absence of such proof, the onus of which lies on the plaintiff, the plaintiff is not entitled to a decree and the plaintiff is not competent to sue on the original consideration apart from the bill.

Who can present and to whom

It is the holder of the bill who can demand its acceptance and, therefore, the holder or his authorised agent is competent to present it. One unconnected with the bill in either of the capacities cannot, therefore, present it for acceptance. The bill has to be presented to the drawee or his duly authorised agent or if the drawee is dead or bankrupt, to his legal representative or the official assignee as the case may be. If there are more drawees than one it must be presented to all of them.

II of 1885