Presentment for Acceptance a.
Where the bill is payable after sight, or
when it is necessary in order to fix the
What?
maturity of the instrument.
A bill of exchange is a negotiable instrument b. Where the Bill expressly stipulates that it
in writing containing an unconditional order, shall be presented for acceptance.
directing a certain person to pay a certain amount c. Where the bill is drawn payable elsewhere
only to or to the order of a certain person or to the than at the residence or place of business of
bearer. the drawee.
Out of all the negotiable instruments, only
bills of exchange require presentment for When made?
acceptance.
The presentment for acceptance shall be
Presentment for acceptance refers to done before maturity, within a reasonable time
presenting of a bill of exchange to the drawee after it is drawn, on a business day during business
named in the bill of exchange for hours at a business place or residence of the
his acceptance and agreement to pay the bill, drawee.
usually at some time in the future.
A bill may be presented for acceptance on
The acceptance can be either general or any day on which negotiable instruments may be
qualified. As a rule, acceptance needs to be presented for payment under the provisions of Sec.
general. General acceptance is absolute. A qualified 72 and Sec 85 of the NIL.
acceptance is made subject to some condition or
qualification. When Saturday is not otherwise a holiday,
presentment for acceptance may be made before
It thus varies the effect of the bill. The holder of a 12 o’clock noon on the day.
bill may refuse to take a qualified acceptance. In
Where?
this case, he may treat the bill as dishonoured by
non-acceptance and sue the drawer. Presentment of acceptance may be made at
the place where the bill is drawn payable. The
Why?
place where the bill is drawn payable can be
The bill of exchange must be presented for determined on the face of the instrument. The
acceptance or negotiated within in a reasonable place of presentment for acceptance is generally
time because failure to do so discharges all the not material since the drawee need only to write
indorsers and the drawer. his acceptance on the bill if he wishes to accept.
When necessary? How?
Generally, PA is not necessary in order to Presentment for acceptance must be made
render any party liable to the bill. However, there by or on behalf of the holder
are certain cases which require a bill of exchange Bill must be presented for acceptance at a
to be presented for acceptance. (Sec. 143 NIL) reasonable hour on a business day
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Presentment for acceptance must be made 1. When the bill is drawn payable in a place
before the bill is overdue other than the place of business or
The bill must be presented for acceptance residence of the drawee.
to the drawee or some person authorized 2. The holder has no time, even with the
to accept or refuse to accept on his behalf. exercise of reasonable diligence, to
present present the bill for acceptance
To whom? before presenting it for payment in the
To the drawee or to his duly authorized day that it falls due.
agent. When is presentment excused?
When the bill is addressed to two or more
drawees who are not partners, it must be 1. When the drawee is dead, or has
presented to all the drawees except when absconded, or is a fictitious person or a
one was given the authority to accept or person not having capacity to contract the
refuse to accept. bill.
When the drawee is dead, presentment 2. Where after the exercise of reasonable
may be made to his personal representative diligence, presentment cannot be made.
(Note: Presentment for acceptance is not necessary when the 3. When, although presentment has been
drawee is dead.)
irregular, acceptance has been refused on
When the drawee is bankrupt or insolvent
some other ground.
or has made an assignment for the benefit
of the creditors, presentment may be made When is a bill dishonored by non-acceptance?
to him or to his trustee of assignee. (Sec.
145 (c) NIL) 1. When it is duly presented for acceptance
The acceptor for honour. and such an acceptance is refused or cannot
be obtained.
Acceptor for honour 2. When presentment for acceptance is
excused, and the bill is not accepted.
Is any person who is not already liable on
the bill, whom with the holder’s consent may Duty of the holder where bill is not accepted
accept the bill for honour of any party thereto, by
writing on the bill when the bill has been noted or The person presenting it must treat the bill
protested for non-acceptance or better security. as dishonored by non-acceptance or he loses
the right of recourse against the drawer and
He is liable to pay only after the proper indorsers.
presentment of the bill on maturity to the drawee
for payment and he refuses to pay and the bill is Rules when a bill is dishonored by non-acceptance
noted or protested for non-payment. 1. The right against all secondary party
accrues to the holder.
2. No presentment for payment is necessary
When may delay in making PA be excused? since dishonor of the of the instrument is to
be expected.
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3. If the instrument is accepted after it has
been dishonored by non-acceptance,
presentment of payment is necessary upon
maturity.
4. In case of non-payment, holder must give
the corresponding notice of dishonor ,
otherwise, secondary parties are
discharged.
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