Section 64 NI Act: Presentment for payment
Negotiable Instruments Act, 1881
Section 64 NI Act at a Glance
Section 64 NI Act requires promissory notes, bills of exchange, and cheques to be presented for payment to the maker, acceptor, or drawee, failing which other parties are not liable to the holder. It also lets a drawee bank verify a truncated cheque.
Section 64 NI Act Bare Act Text
64. Presentment for payment.
(1) Promissory notes, bills of exchange and cheques must be presented for payment to the maker, acceptor or drawee thereof respectively, by or on behalf of the holder as hereinafter provided. In default of such presentment, the other parties thereto are not liable thereon to such holder.
Where authorized by agreement or usage, a presentment through the post office by means of a registered letter is sufficient.
Exception.—Where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof.
(2) Notwithstanding anything contained in section 6, where an electronic image of a truncated cheque is presented for payment, the drawee bank is entitled to demand any further information regarding the truncated cheque from the bank holding the truncated cheque in case of any reasonable suspicion about the genuineness of the apparent tenor of instrument, and if the suspicion is that of any fraud, forgery, tampering or destruction of the instrument, it is entitled to further demand the presentment of the truncated cheque itself for verification:
Provided that the truncated cheque so demanded by the drawee bank shall be retained by it, if the payment is made accordingly.
Amendments to this section
- Added by Act 2 of 1885, s. 4.
- Section 64 renumbered as sub-section (1) thereof by Act 55 of 2002, s. 3 (w.e.f. 6-2-2003).
- Ins. by Act 55 of 2002, s. 3 (w.e.f. 6-2-2003).
Section 64 NI Act in Simple Words
Section 64 NI Act sets the core requirement for presenting negotiable instruments for payment and explains how truncated cheques are verified. Under Section 64(1) NI Act, a promissory note must be presented for payment to its maker, a bill of exchange to its acceptor, and a cheque to its drawee. This presentment must be made by the holder or on behalf of the holder as the later provisions of the Act provide. If the holder defaults in making this presentment, the other parties to the instrument are not liable on it to that holder.
Section 64(1) NI Act also provides that where an agreement or usage authorizes it, presenting the instrument through the post office by a registered letter is sufficient. An exception in Section 64(1) NI Act states that where a promissory note is payable on demand and is not payable at a specified place, no presentment for payment is necessary in order to make the maker of the note liable.
Section 64(2) NI Act deals with a truncated cheque. Notwithstanding anything in Section 6 NI Act, when an electronic image of a truncated cheque is presented for payment, the drawee bank can demand further information about the truncated cheque from the bank holding it if there is any reasonable suspicion about the genuineness of the apparent tenor of the instrument. If the suspicion is of fraud, forgery, tampering, or destruction of the instrument, the drawee bank is further entitled to demand that the truncated cheque itself be presented for verification.
Under the proviso to Section 64(2) NI Act, if the drawee bank demands the truncated cheque and makes the payment accordingly, the drawee bank must retain that truncated cheque. Act 2 of 1885 added the paragraph on presentment through the post office. Act 55 of 2002 renumbered the section as sub-section (1) and inserted sub-section (2), from 6 February 2003.
When Section 64 NI Act Applies
- A promissory note, bill of exchange, or cheque must be presented for payment to the maker, acceptor, or drawee respectively, by or on behalf of the holder.
- In default of such presentment, the other parties to the instrument are not liable on it to the holder.
- Presentment through the post office by a registered letter is sufficient where authorized by agreement or usage.
- No presentment is needed to charge the maker of a promissory note payable on demand and not payable at a specified place.
- When an electronic image of a truncated cheque is presented, the drawee bank may demand further information upon reasonable suspicion about the genuineness of the apparent tenor, and may demand the physical truncated cheque if the suspicion is of fraud, forgery, tampering, or destruction.
- If payment is made after the truncated cheque is demanded, the drawee bank must retain the truncated cheque.
Example of Section 64 NI Act
When Section 64 NI Act Does Not Apply
- Under the Exception to Section 64(1) NI Act, no presentment is necessary in order to charge the maker of a promissory note that is payable on demand and is not payable at a specified place.
FAQs on Section 64 NI Act
What is Section 64 NI Act?▼
Section 64 NI Act requires promissory notes, bills of exchange, and cheques to be presented for payment to the maker, acceptor, or drawee respectively, by or on behalf of the holder, failing which other parties are not liable to the holder. It also sets out when presentment by registered post is allowed, when presentment is not needed to charge the maker of a demand promissory note, and when a drawee bank can demand details or physical presentment of a truncated cheque.
To whom must a promissory note, a bill of exchange, and a cheque be presented for payment under Section 64(1) NI Act?▼
To the maker for a promissory note, to the acceptor for a bill of exchange, and to the drawee for a cheque.
What happens if the holder does not present the instrument for payment under Section 64(1) NI Act?▼
The other parties to the instrument are not liable on it to that holder.
Can an instrument be presented for payment by post under Section 64(1) NI Act?▼
Yes. Where authorized by agreement or usage, presentment through the post office by means of a registered letter is sufficient.
Is presentment for payment always needed to hold the maker of a promissory note liable under Section 64(1) NI Act?▼
No. Under the Exception to Section 64(1) NI Act, when a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge its maker.
When can a drawee bank demand the physical truncated cheque itself under Section 64(2) NI Act?▼
When an electronic image of a truncated cheque is presented for payment and the drawee bank's suspicion is of fraud, forgery, tampering, or destruction of the instrument.
Who keeps the physical truncated cheque after the drawee bank verifies and pays it under Section 64(2) NI Act?▼
The drawee bank. Under the proviso to Section 64(2) NI Act, the truncated cheque demanded by the drawee bank must be retained by the drawee bank if payment is made accordingly.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·