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PRESENTMENT
QUESTION BANK.
Q.1. Write a detailed note on “Presentment of the instrument”. Apr. 2004.
Q.2. State the cases where payment for acceptance is obligatory, and discuss the rules as to time for presentment and place for presentment.
Q.3. Examine and illustrate the concept of presentment for acceptance and presentment for payment. When is presentment for payment unnecessary?
SHORT NOTES.
- Presentment of the instrument. Nov. 04.
2 Presentment for acceptance.
3 Presentment for payment.
4 When presentment for acceptance is not necessary.
SYNOPSIS.
1) Presentment for acceptance (S. 61):-
- a) Bill requiring presentment for acceptance:-
- i) Bill payable ‘after sight’:-
- ii) Express stipulation for presentment:-
- b) Bill requiring no presentment for acceptance:-
Rules as to presentment:-
(1) Place for payment (S. 61):-
(2) Time for payment (S. 62):-
(3) Drawee’s Time for deliberation:-
2) Presentment for payment (S. 62):-
Rules as to presentment for payment:-
- a) Hours for presentment (S. 65):-
- b) Time for presentment (S.):-
- c) Presentment of Promissory Note payable by instrument (S. 67)
- d) Place of Payment (S. 68 & 69, 70, 71):-
‘Presentment[1]’ is the act of tendering the instrument or bill by the payee to the drawee to facilitate the payee to accept it and make arrangements for its payment.
Thus, presentment has two stages:-
1) Presentment for acceptance (S. 61):-
By acceptance, the drawee shows his readiness to make payment of the bill. By acceptance, the drawee consents to payment. Presentment for acceptance is the stage prior to the stage of presentment for ‘payment’. Thus, presentment for acceptance is the first stage wherein the drawee acknowledges the bill and undertakes to pay, whereas ‘presentment for payment’ is the second stage of presentment for the actual payment of the bill already acknowledged. However, every bill does not need to be presented for acceptance.
a) Bill requiring presentment for acceptance:-
The following bills shall be presented for acceptance –
i) Bill payable ‘after sight[2]’:-
‘After sight’ means the bill is payable at a given time after it has been sighted (presented or shown) to the drawee for his knowledge.
In this case, the bill is first presented to the drawee for his knowledge, and then the drawee signs his acceptance of the bill. Then, payment can be demanded from him at the maturity date. E.g. If the bill is made payable 30 days after sight’, it is to be first presented for the drawee’s knowledge, and once the drawee accepts it, the payment can be made after 30 days, but not before.
ii) Express stipulation for presentment:-
If there is an express stipulation (condition) regarding its presentment for acceptance, the bill is to be presented for acceptance.
To fix the drawee’s liability, the above-mentioned bills must be presented for his acceptance. It will be treated as dishonoured if he does not accept the bill.
b) Bill requiring no presentment for acceptance:-
In no other case (then the above-mentioned) is presentment for acceptance necessary? Thus, the bill payable on demand (at sight), payable at a fixed date, or payable on the happening of a certain event need not be presented for acceptance. They are payable immediately in the circumstances mentioned above. In other words, they are payable at presentment; acceptance for them is not necessary.
Rules as to presentment:-
(1) Place for payment (S. 61):-
The bill should be presented at the place which is specified for payment. If no place for presentment is specified, the bill should be presented at the drawee’s place of business or residence. If the drawee could not be found at the place after a reasonable search, the bill is deemed to have been dishonoured.
(2) Time for payment (S. 62):-
Bill or Promissory Note payable ‘after sight’ should be presented for drawee’s or maker’s acceptance within the specified time or, if no time is specified, within a reasonable time of its issue.
(3) Drawee’s Time for deliberation[3]:-
The holder should allow the drawee only 48 hours, excluding public holidays, to consider whether he will accept the bill or not.
2) Presentment for payment[4] (S. 62):-
Presentment for payment is presentment for the actual payment of the amount mentioned in the bill. It is the second stage in a bill payable ‘after sight’, after the first stage, i.e. ‘payment for acceptance’. Once acceptance is given to the bill by the acceptor or drawee, the bill is presumed to have been honoured. Presentment for payment presumes that the bill has not been dishonoured by non-acceptance. In this stage of ‘presentment for payment’, the holder is to present the instrument due for payment (S. 64). In default of such presentment, the other party to the instrument is discharged from their liability to the holder. This section merely provides that the other parties are not liable to the holder unless the bill is presented for acceptance. The acceptor is called the principal debtor, and his liability is independent of payment.
However, where a Promissory Note is payable on demand and not payable at a specific place, its presentment for payment is not necessary to make the maker liable (an exception to S. 64).
Rules as to presentment for payment:-
a) Hours for presentment (S. 65):-
Presentment for payment must be made during the usual hours of business and banker’s, within banking hours.
b) Time for presentment (S.):-
Where an instrument is payable after a fixed period of time, it should be presented for payment on its maturity. On failure, other parties get discharged from their liability.
c) Presentment of Promissory Note payable by instalments (S. 67).
Where a Promissory Note is payable by instalments, it must be presented for payment on the third day after the date fixed for payment of each instalment. Thus, every instrument is entitled to three days of grace. A failure to pay a single instalment has the same effect as non-payment of the note at its maturity.
d) Place of Payment (Ss. 68 & 69, 70, 71):-
Where an instrument is payable at a specific place and not elsewhere, it must be presented at that place. For presentment at another place, no party would be liable to the holder (S. 68 & S.69).
Where no such place for presentment is specified, it should be made at the place of business of the maker, drawee or acceptor, as the case may be. If he has no place of business, presentment shall be made at his usual residence (S. 70).
Where no place for presentment for acceptance or payment is specified, and the maker, drawee, or acceptor also does not have any known place of business or fixed address, presentment can be made to him in person wherever he can be found.
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[1] सादर करणे. [प्रस्तुत करना।]
[2] हुंडी की जी रक्कम मिळण्यापूर्वी बघण्यासाठी सादर करावी लागते जेणे करुन रक्कम देण्यासाठी देणा-यास तयारी करता येते. [हुंडी कुंजी जिसे राशि प्राप्त होने से पहले देखने के लिए प्रस्तुत करना होता है ताकि भुगतानकर्ता राशि का भुगतान करने के लिए तैयार हो सके।]
[3] ज्याच्या नावे हुंडी काढली आहे त्यास विचार करण्यास वेळ देणे. [हुंडी की रकम देनेवाले को सोचने का समय देना।]
[4] रक्कम देणेसाठी सादर करणे [राशि के भुगतान हेतु प्रस्तुत करना]