PRESENTATION ON NEGOTIABLE INSTRUMENT ACT,1881 CHAPTER- PRESENTMENT SUBMITTED TO- PROFF. FALAK KHANNA SUBMITTED BY- CHAHAT MALHOTRA (2279) SAMRIDHI (2343) CLASS- BCOM-I SECTION- B

Presentment Placing of the negotiable instrument before a drawee is called presentment. Presentment may be for any of the following purposes: Presentment for acceptance Presentment for sight Presentment for payment

Presentment for Acceptance Among the negotiable instruments it is only a bill of exchange which has to be presented for acceptance. But it is not necessary to present every bill of exchange for acceptance. Those bills which are payable on demand need not be presented for acceptance. But in the case of following bills, the presentment is necessary: Where the bill of exchange is payable after sight it must be presented to the drawee for acceptance to fix the due date of the bill. Where there is an express stipulation in the bill that it shall be presented for acceptance before it is presented for payment. Where it is not necessary to present a bill of exchange for acceptance: It provides additional security to the bill by getting acceptor’s signature on the bill. It also provide immediate right to hold the prior parties liable for non acceptance.

How acceptance is made? In order to make drawee liable, it is necessary that he should give his assent by signing on the face of the bill. It is immaterial that he may or may not write the word “accepted”. Oral acceptance is no acceptance. Essentials of a valid acceptance: It must be given in writing. It must be signed by the drawee or his authorize agent. It must appear on the face of the bill of exchange. It should be presented for acceptance on specified time. If no time is specified it should be presented within a reasonable time. It should be presented for acceptance at a specified place. If no such place is specified, it should be presented at the business place or residence of the drawee.

Modes of acceptance General or absolute acceptance- Where the drawee of a bill of exchange gives his acceptance without any condition, it is said to be a general or absolute acceptance. It is sufficient on the part of the drawee that he puts his signature on the face of the bill and he need not write the word “accepted”. Qualified acceptance- Where the drawee of the bill of exchange adds and any condition while accepting it, it is said to be a qualified acceptance. If the holder refuses to take qualified acceptance he may treat the bill as dishonored. Where the holder accepts the qualified acceptance all parties shall stand discharged, if there consent was not taken on the qualified acceptance.

Who can make a valid presentment? The drawee of the bill and any other person entitle to demand acceptance can present a bill for acceptance. To whom presentment can be made? A bill of exchange can be presented for acceptance to the followings: The drawee of the bill. The drawee in case of need. All the drawees where there are more than one drawee. The legal representative of a deceased drawee. The Official Receiver or Official Assignee of an insolvent drawee. The authorized agent of a drawee. The acceptor for honor.

Time for presentment When a bill of exchange is drawn, it should be presented for acceptance: When the time is specified within that specified time. When the time is not specified within a reasonable time. When the presentment is not necessary, any time before payment. Place for presentment When a bill of exchange is drawn, it must be presented for acceptance at a place: When the place is specified, at that specified place. When the place is not specified, at drawees place of business or residence.

Presentment for acceptance when excused: Where presentment is excused, the bill is deemed to be dishonored for non acceptance. When the drawee is a fictitious person or one in capable of contracting. When he cannot after a reasonable search be found. Where though the presentment is irregular, acceptance has been refused on some other ground. Where the drawee is dead or insolvent, the bill may not be presented for acceptance to his legal representative or the official assignee as the case may be.

Acceptance for honor A bill of exchange can be accepted only by person or persons on whom it is drawn. An acceptance for honor is a peculiar kind of acceptance which is allowed when the original drawee of a bill refuses to give a better security when demanded by a notary public. Any person who is not liable on the bill can accept to save the credit of some or all of the parties to a bill. Even a stranger can undertake such an acceptance. Essentials of a valid acceptance for honor Such an acceptance must be made after noting or protesting and in no case before it. It must be made with the consent of the holder. It can be made only by the person who is not liable on the bill. It must be for the honor of any party liable on the bill. It must be made by a writing on the bill and for the whole amount for which the bill is drawn. It must be signed by the acceptor of honor. It must be made before the bill is overdue.

PRESENTMENT FOR SIGHT In the case of BJP after sight, Presentment for acceptance is essential before PAYMENT. But in the case of promissory notes, no acceptance is required. Section 62 of the Act provides that in the case of promissory notes when the words ‘after sight’ appear, they mean after presentment for sight. Where a promissory notes is made payable after sight, it is necessary to present it for the sight in order to fix the maturity of the instrument.

PRESENTMENT FOR PAYEMENT Promissory notes, will of exchange and cheques must be presented for payement to the makes, acceptor or draure thereof respectively. The object of the presentment thereof respectively. The object of the presentment is to give the party concerned an opportunity to pay. Valid presentment for payement means presentment (i) on the proper day (iii) at the proper haru (iii) by the proper person (v) at proper lace (v) by proper person and (vi) in proper manner

RULES REGARDING PRESENTMENT FOR PAYEMENT Presentment through post office – It is valid to make presentment of an instrument through post office provided such mode is agrud upon by the parties or is in accordance with usage (Section 64) Hours of Presentment – The instrument must be presented for payement during usual business hours and if payable at a bank during the usual banking hours (Sec 65)

3. Presentment of instruments payable after date or sight – A promissory rate or a bill of exchange made payable at a specified period after date or sight thereof must be presented for payement of maturity (Sec 66) 4. Payement of promissory note payable by installments – A promissory note payable by installments must be presented for payement for payement of the third party after the date fixed for payement of each installement (Sec 67)

5. Presentment of Cheques – In order to charge the drawer, a cheque must by presented to the bank on which it is drown before the relation between the drawer and his banker has been altered to the prejudice of the drawer (Sec 72). A cheque must be presented within a reasonable time (Sec 73) 6. Place of Presentment– Where a bill is made or accepted at a specified place and not elsewhere it must be presented a the place of payment (Sec 68). If a bill is drawn at a specified place, it must be presented for payement at that place in order to change the maker or drawer thereof (Sec 69) Where no places of presentment is specified in the note of bill, it must be presented for payement at the place of business (Sec 70)

7. Presentment of instrument payable on demand – A negotiable instrument payable on demand must be presented for payment within a reasonable time after it is received by a holder. When delay in payement is excused (Sec 75) Delay in making presentment for acceptance or payement is excused when the delay caused by circumstances beyond the control of the holder.

When Presentment is unnecessary Sec enumerates the cases where presentment for payement is excused and holder can treat the instruments as dishonoured: When presentment is intentionally prevented Business place closed No person at the place of payement When the payer cannot be found When the payer expressly or impliedly waives his right Where drawer could not duffer damages Dishonour by non-acceptance Promise to pay not withstanding non-presentment Where presentment has become impossible Where the drawer is a fictitious person.

PRESENTMENT FOR HONOUR When a bite has been noted or protested for non-payement, any person may pay it for the honour of any party enableon the bill. But unlike acceptance for honour, payement for honour can only be made by a declaration by the person making it or his agent before the not any public.

ESSENTIALS OF A VALID PAYEMENT FOR HONOUR The bill must have been previously noted or protested for non-payement Such declaration must be recorded by the notary public T person paying or his agent must declare before a notary public the party for whose honour he pays, Payement for honour may be made by any person whether he is enable as a party to the bill or not