On presentation – At sight – After sight: The maturity of a promissory note or bill of exchange is the date on which it falls due. Instrument marked at sight and on presentation means payable on demand.
Though instruments marked at sight and on presentation means payable on demand, yet they differ as regards calculation of limitation period under the Limitation Act 1963. In case of instrument payable at sight, the period of limitation is three years from the date when the bill is presented for payment. In the case of instrument payable on demand the period of limitation is three years from the date of the bill or note.
Instrument marked after sight or after date in a promissory note means after presentment for sight, and in a bill of exchange means after acceptance or noting for non-acceptance or protest for non acceptance.
As discussed above, promissory notes and bills of exchange cannot be drawn conditional. Mere mention of the words after sight or after date will make the instrument conditional on account of uncertainty of is maturity and therefore a bad instrument. Words after sight or after date have to be specified with exact period sixty days after sight or three months after date.
In a promissory note, the words after sight mea presentment for sight, for example the payment on a note ca be demanded only after it has been exhibited to the maker of the note, as no acceptance is required in a note. However, a bill which requires acceptance the words after sight mean that no payment can be demanded on the bill till the bill is exhibited for acceptance or having been dishonored after noting for non-acceptance or after protest for non-acceptance.
Days of grace: Every promissory note and bill of exchange which is not expressed to be payable on demand or at sight or on presentment is at maturity on the third day, for example it is entitled to three days grace after the day on which it is expressed to be payable. A cheque is always payable on demand. It is not entitled to any days of grace. Similarly instruments payable on demand or at sight or on presentment are also entitled to three days of grace. Thus, only following instruments are entitled to days of grace:
1) bills and notes payable on a specified day;
2) bills and notes payable at a certain period after date or after sight;
3) Bills and notes payable at a certain period after the happening of a certain event.
In case of bills and notes payable in installments three days of grace is allowed on each installments where days of grace are allowed, instruments must be presented for payment only on the last day of grace.
a) A bill dated 30th November is made payable three months after date. It falls due on 3rd March.
b) A note dated 1st January is payable one month after sight. It falls due on 4th February.
Calculating maturity of a bill or note
Payable so many months after date or sight:
In calculating maturity of a bill or note made payable at a stated number of months after date or after sight, or after a certain event, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight or noted for non acceptance or protested for non acceptance or when the event happens. If the month in which the period would terminate has no corresponding days, the period shall be held to terminate on the last day of such month.
a) A negotiable instrument, dated 19th January, 1878 is made payable at one month after date. The instrument is at maturity on the third day after 28th February, 1878.
b) A negotiable instrument dated 30 th August, 1878 is made payable three months after date. The instrument is at maturity on the 3 rd December, 1878.
c) A promissory note or bill of exchange dated 31 st August, 1878 is made payable three months after date. The instrument is at maturity on the 3 rd December, 1878.
Payable so many days after date or sight:
In calculating the maturity of a bill or note payable, a certain number of days after date or after sight, or after a certain event, the day of the date or presentment for acceptance or sight shall be excluded. In other words, the day from which the time is to run is to be excluded.
When day of maturity is a holiday: When the day on which a promissory note or bill of exchange is at maturity is a public holiday, the instrument shall be due on the next day preceding business day.