Section 64 of the Negotiable Instruments Act,1881.
1) Promissory notes, bills of exchange and cheques must be presented for payment to the maker, acceptor or drawee thereof respectively, by or on behalf of the holder as hereinafter provided. In default of such presentment, the other parties thereto are not liable thereon to such holder.
Where authorized by agreement or usage, a presentment through the post office by means of a registered letter is sufficient.
Exception. Where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof.
2) Notwithstanding anything contained in section 6, where an electronic image of a truncated cheque is presented for payment, the drawee bank is entitled to demand any further information regarding the truncated cheque from the bank holding the truncated cheque in case of any reasonable suspicion about the genuineness of the apparent tenor of instrument, and if the suspicion is that of any fraud, forgery, tampering or destruction of the instrument, it is entitled to further demand the presentment of the truncated cheque itself for verification: Provided that the truncated cheque so demanded by the drawee bank shall be retained by it, if the payment is made accordingly.
The second paragraph of clause (1) was added by Sec 4 of the N I Act 18851).
This section deals with presentment for payment which, in the case of a bill, must follow presentment for acceptance and must be at maturity and not before. A bill can only be presented for payment when it has been accepted and not dishonoured by non-acceptance. When one makes payment he has a right to the possession of the instrument. It, therefore, follows that the person making the presentment for payment should be prepared and able to deliver the instrument at that time on proper receipt. A pleader’s notice for payment is not presentment. If due presentment is not made, in accordance with the rules laid down in the next following section, all parties to the bill, except the maker and the acceptor, are absolved from their liability to the holder.
Presentation for payment of a pronote should be made to the maker thereof, of a bill of exchange to the acceptor and of a cheque to the drawee. Therefore, where a note is drawn by a person on himself nor presentment is necessary as obviously there is no acceptor. In case any one of such parties is dead or is adjudicated an insolvent, the presentation should be made to the legal representative of the deceased or to the assignee or receiver of the insolvent. Where a drawee in case of need is named in a bill of exchange, or in any indorsement thereon, the bill is not dishonoured until it has been dishonoured by such drawee and this makes presentment to such drawee in case of need obligatory on the holder.
The instrument should be presented by one who is entitled to payment, that is, by the holder or by a duly authorised agent acting on his behalf. It cannot be presented by any one else. In case of the death or insolvency of the holder, his legal representative or assignee can make the presentment. A person who can give a valid discharge is competent to present the instrument.
Presentment for payment is necessary to make the endorser of a promissory note, not covered by the exception, liable to the endorsee. Presentation is necessary only for making liable persons other than the makers. Therefore, in order to make the maker alone liable no presentation is necessary as his liability, as the principal debtor, is not discharged by the holder's failure to present it at due date although the other parties are discharged by non-presentment. But where an on-demand pronote or a bill of exchange is payable at a specified place and not elsewhere presentment must be made at that particular place even to make the maker of a note or the acceptor of a bill liable. If, however, the maker has made part payment no presentation is necessary.
It has been stated before that the maker of a note and the acceptor of a bill will continue to be liable and non-presentation will not absolve either from his liability as he is the principal debtor. The view taken in an Oudh case that the “other parties' in section 64 mean other than the holder and, therefore, presentation is necessary to make the acceptor of a bill liable does not appear to be correct as 'other parties' cannot mean other than the holder who has no present liability. It means other than the maker, acceptor or drawee to enforce whose liability no presentment is necessary. Presentation is also not necessary where the drawer and the drawee are the same person or persons. Where presentation is necessary and not optional non-presentation will have the effect of discharging all the parties other than the maker, the acceptor and the drawee. The loss of a bill or note does not excuse non-presentment. An endorser of a note payable on demand is discharged from liability to the endorsee if there is no presentment.
Where a drawer countermands the order of payment non-presentment is not excused. In such a case no suit will lie even for original consideration. The burden of proof that the drawer did not suffer any loss by non-presentment of a hundi lies on the payee.
The section is not happily worded and is apt to cause uncertainty as to the intention of the legislature. It cannot be conceived that the exception was intended to override the operative portion of the section and that it can wipe out the general law enacted in the opening paragraph of the section. It may be that by inserting the exception the legislature intended to lay down the rule that if an on-demand pronote is payable at a specified place it must be presented for payment at that place in order to render the maker liable. This would be an exception to the general rule that presentment for payment is not necessary to charge the maker. Where, therefore, no place for payment is specified no presentment is necessary to charge the maker. The meaning of the word “place” it is, however, difficult to make out. The expression is rather vague. Where a note is made payable at a certain town which is not the place of residence of the maker it becomes difficult for the holder to make the presentment. A town, no doubt, is a specified place. But if it has no bank where is the presentment to be made it is difficult to say. Where there are banks it is possible to meet the requirements of the law by presenting it to all the banks. The word, place, includes places. If more than one place are mentioned, there must be presentment at one or other of those places. In the Punjab where the pronote is payable is the residential site of a revenue estate where the lender lives, the naming of it is sufficient to make the note payable only at a specified place.
Clause 2 of the section was inserted by section 3 of Act No. 55 of 2002. Cheque truncation is a process that involves the digitalisation of a physical paper cheque into a substitute electronic form for transmission to the drawee bank. This clause gives drawee bank right to demand any further information regarding the truncated cheque from the bank holding the truncated cheque in case of any reasonable suspicion about the genuineness of the apparent tenor of instrument. And if the suspicion is that of any fraud, forgery, tampering or destruction of the instrument, then the drawee bank is entitled to demand the presentment of the truncated cheque itself for verification.