What must be there before Presentment of instruments for payment unde NI Act?

Presentment of a bill of exchange means it exhibition to drawee or acceptor by holder with a request for payment in Accordance With Its Apparent Tenor (section 64). In default of presentment, the drawer and the endorser would be discharged form their liability to the holder. 

Few Important points must be clear about presentation

(i) By whom and to whom presentment is to be made: Presentment is to be made either by the holder or by somebody on behalf of the holder. Promissory notes are to be presented to the maker; bills of exchange are to be presented to the acceptor; and cheque are to be presented to the drawee.

(ii) Time of presentment for payment: (a) Presentment should be made during the usual business hours (Section 65( (b) If the bill is made payable a specified period after date or sight, it must be presented for payment at its maturity (Section 66) (C). If the bill is payable on demand, it must be presented for payment within a reasonable time after its receipt by the holder (Section 74).

(iii) Place of presentment for payment: (a) If the bill is drawn or accepted payable at a specified place and not elsewhere, it must be presented for payment at such a place in order to charge any party to the bill (Section 68) (b). If, however the bill is accepted payable at a special place (the word “and not elsewhere” being omitted) then to charge the drawer ( but not he acceptor), presentment should be made at the place specified (Section 69) (C) If no place of payment is specified then the bill should be presented for payment at the place of business ( if any ) or the residence of the drawee or acceptor or (if he has no fixed place of business or residence) to him in person wherever he can be found (Section 70 and 71).

(iv) Presentment of promissory note payable by installment (Section 67)

A promissory note payable by instalments must be presented for payment on the third day after the date fixed for payment of each instalment.

(v) Presentment of cheque to drawer (Section 72): It is the duty of the holder of cheque to present it at the bank upon which it is drawn. If payment is refused by the bank, the holder may sue the drawer. If the holder sues the drawer without first presenting the cheque at the bank, the suit will be dismissed.

If the holder does not present the cheque at the bank in time, the position of the bank may become unsound and it may not be possible for the banker to honour the cheque; in this case, the drawer is not liable if the bank refuses payment on present­ment. The rule is that the cheque must be presented before the relation between the drawer and his banker has been altered to the prejudice of the drawer.

(vi) Distinction between drawer of bills and drawer of cheque: If a bill is not presented in time, the drawer is absolutely discharged; but the drawer of a cheque, in case of delay in presentment, is discharged only if he has suffered some loss or injury and that too, to the extent of such loss only. Therefore, if the bank remains solvent, the drawer will remain bound after presentment and refusal, although solvent, the drawer will remain bound after presentment and refusal, although months ( short of the period of limitation ) have elapsed since the drawing.

(vii) Presentment of cheque to charge any other person (Section 73) : It may be recalled that in order to charge the drawer, the cheque must be presented before the relation between the drawer and his banker has been altered to the prejudice of the drawer, but in order to charge any person other than the drawer the cheque must be presented within a reasonable time. For example, A drawes a cheque in favour of B, who endorses it to C. C must present it at the bank within a reasonable time, otherwise B will be discharged from liability.

(viii)Presentment of instrument to agents, etc. (Section 75): Presentment for acceptance or payment may be made not only to the drawer maker or acceptor acceptance or payment may be made not only to the drawer maker or acceptor but also to his duly authorized agent or where he is dead to his legal representative, or where he has been declared an insolvent, to his assignee.