Presentment for payment

Presentment for Payment is the formal act of demanding payment from the person who is liable to pay a negotiable instrument, such as a cheque, bill of exchange, or promissory note.

Definition

Under the Negotiable Instruments Act, 1881, presentment for payment means showing or presenting the instrument to the maker, acceptor, or drawee and asking for payment on the due date or within the prescribed time.

Why is Presentment Necessary?

Presentment for payment is important because:

1. It gives the debtor an opportunity to pay.
2. It fixes the liability of other parties such as endorsers and drawers.
3. Failure to make proper presentment may discharge certain parties from liability.
4. It is necessary before taking legal action in many cases.

Rules Regarding Presentment for Payment

1. Time of Presentment
   • A promissory note or bill of exchange must be presented on the due date.
   • A cheque must be presented within a reasonable time from the date of issue.
2. Place of Presentment
   • If a place of payment is specified in the instrument, it must be presented there.
   • If no place is specified, it should be presented at the maker’s or acceptor’s place of business or residence.
3. Business Hours
   • Presentment should be made during normal business hours.
   • For banks, cheques must be presented during banking hours.
4. Person to Whom It Must Be Presented
   • It should be presented to:
     • the maker of a promissory note,
     • the acceptor of a bill of exchange, or
     • the drawee bank in the case of a cheque.

When Presentment is Excused

Presentment for payment is not necessary when:

• The maker, acceptor, or drawee intentionally prevents presentment.
• The person liable cannot be found after reasonable search.
• The party liable has waived the requirement of presentment.
• The instrument is payable at a specified place and nobody is available there to make payment.
• Presentment becomes impossible due to circumstances beyond control.

Example

Suppose A draws a bill of exchange on B for ₹50,000 payable after 3 months.

• On the due date, the holder C presents the bill to B and demands payment.
• If B pays, the bill is discharged.
• If B refuses to pay, the bill is dishonoured, and C can proceed against other liable parties according to law.

Short Exam Answer

Presentment for Payment means presenting a negotiable instrument to the person liable to pay and demanding payment at the proper time and place. It is necessary to fix the liability of parties and to obtain payment. It must be made on the due date, at the proper place, during business hours, and to the proper person. In certain circumstances, such as waiver or impossibility, presentment is excused.

This topic is mainly covered under Sections 64 to 76 of the Negotiable Instruments Act, 1881.