Presentment

Meaning:
Presentment means the formal production of a negotiable instrument to the person liable on it for acceptance or payment.

According to the Negotiable Instruments Act, 1881, presentment is necessary to make the parties liable and to obtain acceptance or payment of the instrument.

Types of Presentment

1. Presentment for Acceptance
   • The bill of exchange is presented to the drawee to obtain his acceptance.
   • It is generally required for bills payable after sight.
2. Presentment for Payment
   • The instrument is presented to the maker, acceptor, or drawee for payment on the due date.
   • It applies to promissory notes, bills of exchange, and cheques.

Essentials of a Valid Presentment

• It must be made by the holder or his authorized agent.
• It should be made at the proper place.
• It should be made on the proper date.
• It must be made during business hours.
• It should be made to the proper person liable to accept or pay.

Importance of Presentment

• It gives the debtor an opportunity to accept or pay.
• It fixes the liability of drawers and endorsers.
• It is necessary before treating the instrument as dishonoured.
• It enables the holder to take legal action if payment or acceptance is refused.

Short Exam Answer

Presentment is the act of producing a negotiable instrument before the person liable to accept or pay it and demanding acceptance or payment. It is of two types: presentment for acceptance and presentment for payment. It must be made at the proper time, place, and to the proper person.