Presentment of Negotiable

instrument
Presentment
Presentment means presenting a NI by the holder or his agent before
the acceptor, maker or drawee for acceptance, sight or payment.
Presentment for acceptance
• An acceptance means the acknowledgement of the sum mentioned in
a bill by the drawee. Only BOE requires an acceptance.

• Bill is said to be accepted when the drawee signs on it. When drawee
accepts the bill, he is called acceptor
Essentials of valid acceptance
• Must be in writing

• must be signed by the drawee or his agent

• Acceptance must appear on the bill

• Accepted bill must be returned to the holder.

Types of acceptance
General acceptance
When the drawee accepts the liability to pay the full amount
mentioned in the bill without any condition

Qualified acceptance
When drawee accepts the bill subject to some condition. e.g.
acceptance for an amount less than that mentioned in the bill or for a
longer period than mentioned in the bill.
Who may present
• The holder himself
• Authorized agent of holder
• Endorsee in case of endorsement
Who may accept
Any one of the following can accept a bill:

• The drawee or his authorized agent

• All the drawees or some drawees
• Drawee in case of need if original drawee refuses to accept
• Acceptor for honor i.e. who accepts bill for honor of any other party.
Time of presentment
• Must be presented on a business day within business hours.

• Must be presented within reasonable time, if no time is specified in

the bill

• Must be presented within that time period, if it is specified in the bill

Place of presentment
• If a particular place is specified in the bill, it must be presented for
acceptance at that place.

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

dishonored.

• If no place is mentioned, it may be presented at the usual place of

business of drawee or his residence.
Presentment for acceptance unnecassary
• Not necessary in following cases when:
• Drawee is dead
• Drawee is a fictitious person
• Drawee is incapable to contract
• Drawee cannot be found after reasonable search
• Acceptance is refused on some other ground
 Presentment for sight
• Means showing the note to the maker for his knowledge

• Rules
- the term “after sight” means that payment can be demanded when it is shown
to the maker

- It is necessary to present it for sight in order to fix its maturity

• Rules
- If maker not found after reasonable search, note is treated as
dishonored

- Presentment must be made during business hours on a business day

- In case of default of such presentation, no party is liable to person

making such default.
Presentment for payment
Hours of presentment
Must be presented for payment during usual hours of business and in
case of cheque, during the usual banking hours

Payable after date or sight

A note or bill made payable after date or sight must be presented for
payment at maturity.
Note payable by installments
It must be presented for payment on the third day after the date fixed for
payment of each installment. If any installment not paid, it will be
considered as dishonored.

Place of presentment
- If Ni is made, drawn or accepted at a specified place, it must be
presented at that place for payment

- If Ni is made, drawn or accepted payable at a specified place, it must be

presented at that place for payment
- Place of presentment

- If NI does not indicate the place of payment, it must be presented at

the address or ordinary residence of maker, drawee or acceptor

- If liable party has no place of residence, business, presentment can be

made to him in person wherever he can be found
Instrument payable on demand

- NI payable on demand must be presented for payment within a

reasonable time by the holder

Agent, legal heir or assignee

- Presentment for payment may be made to the agent of drawee, maker
or acceptor. Where drawee, maker or acceptor has died/become
insolvent, presentment may be made to his legal heirs or assignee
Delay in presentment
- Delay in presentment for payment is excused if the delay is caused by
circumstances beyond the control of holder.
- If there is no excuse, presentment must be made within reasonable
time

Right of holder
When bill is not accepted, holder can take action against drawer and
endorser so there is no need to present it for payment.
Presentment for payment unnecessary
• When

- Instrument is payable at payer’s place of business and he closes place

of business during the usual business hours

- Instrument is payable at specified place, and the payer or his agent do

not attend such place during usual business hours

- Payer cannot be found after reasonable search

Presentment for payment unnecessary
when

- There is promise to pay without presentment

- Payee waves his right to receive the payment

- The bill is dishonored by non-acceptance

Presentment for payment unnecessary
when

- Drawee is fictitious person

- Drawer and drawee are the same person

- It is impossible to present the instrument