What is presentment?

Presentment means exhibiting the bill to the drawee so that may see the same and judge whether he shall accept it or not. The person liable to pay is entitled to see the instrument before payment and after payment he is entitled to have it delivered to him. There must be a definite proof of presentment. In default of such presentment the other parties to the instrument are not liable. Sections 61 – 76 of the Act lay down the law regarding presentment . There are two kinds of presentments (1) presentment for acceptance and (2) presentment for payment.

Presentment for acceptance

Certain instruments are required to be first presented for acceptance before they can be presented for payment. Certain instruments require no acceptance. They can be directly presented for payment Presentment for acceptance means presenting the bill to the drawee for acceptance thereof and fixing the date of maturity of the instrument where the bill is payable after sight i.e. at a future date.

Instruments requiring presentment for acceptance:

Acceptance is required only in case of bills. Promissory notes and cheques require no acceptance. However, all bills need not be presented for acceptance. But in the case of following bills, presentment for acceptance is necessary:

1) Bill payable after sight to be presentment for acceptance to fix its date of maturity ; and
2) Bill which expressly stipulates that it shall be presented for acceptance before presenting it for payment.

Effects of non presentment

If the instrument is not presented for acceptance where it is necessary, all the parties to the bill are discharged and no action is maintainable even for the original debt.

Following bills need not be presented for acceptance:

1) bill payable on demand
2) bills payable on a certain date.

In the above cases, presented for acceptance is optional. However, even where presentment for acceptance is optional, it is advisable that the bill be presented for acceptance because of the following advantages:

1) The holder gets and additional security i.e. acceptor. Holder can make him liable for payment
2) The holder can immediately hold the drawer liable in case if the bill dishonored by the drawee for non acceptance. He need not wait till the maturity date of the bill.

It is only in case of bills of exchange payable after sight that presentment for acceptance first and then presentment for payment is required. In case of other bills, both presentments for acceptance and for payment synchronize.

Rules as to presentment for acceptance:

1) A bill of exchange payable after sight, if no time or place is specified therein for presentment must be presented to the drawee for acceptance within a reasonable time after it is drawn. In any case it must be presented before maturity.
2) It must be presented by a person entitled to demand acceptance.
3) It must be presented in business hours on a business day.
4) If the bill is directed to the drawee at a particular place, it must be presented at that place.
5) If after reasonable search, drawee cannot be found, the bill is dishonored.
6) If authorized by agreement or usage, presentment through post office by means of a registered letter is sufficient.
7) Drawee is entitled to 48 hours time (exclusive of public holidays) to consider whether he will accept it or not.
8) If the drawee has no known place of business or fixed residence and no place is specified presentment may be made to him in person wherever he can be found.
9) Presentment may be made to the duly authorized agent of the drawee. When the drawee has died, presentment may be made to hiss legal representatives. Where the drawee has been declared an insolvent, presentment may be made to his assignee.

Presentment for acceptance is therefore to be made to the drawee or to his duly authorized agent, in clear and unequivocal terms. In case of several drawees presentment for acceptance must be made to al of them. If drawee in case of need is mentioned and he is sought to be made liable, it must be presented to him after the bill is dishonored by the original drawee for non acceptance or for nonpayment Presentment for acceptance must be made by the person entitled to demand acceptance usually the holder or by his duly authorized agent.