Section 76 NI Act: When presentment unnecessary
Negotiable Instruments Act, 1881
Section 76 NI Act at a Glance
Section 76 NI Act lists four cases where no presentment for payment is necessary and the instrument is dishonoured on the due date, covering prevention of presentment, engagement to pay despite non-presentment, waiver after maturity, and no possible damage to the drawer.
Section 76 NI Act Bare Act Text
76. When presentment unnecessary.
No presentment for payment is necessary, and the instrument is dishonoured at the due date for presentment, in any of the following cases:—
(a) if the maker, drawee or acceptor intentionally prevents the presentment of the instrument, or,
if the instrument being payable at his place of business, he closes such place on a business day during the usual business hours, or,
if the instrument being payable at some other specified place, neither he nor any person authorized to pay it attends at such place during the usual business hours, or,
if the instrument not being payable at any specified place, he cannot after due search be found;
(b) as against any party sought to be charged therewith, if he has engaged to pay notwithstanding non-presentment;
(c) as against any party if, after maturity, with knowledge that the instrument has not been presented—
he makes a part payment on account of the amount due on the instrument,
or promises to pay the amount due thereon in whole or in part,
or otherwise waives his right to take advantage of any default in presentment for payment;
(d) as against the drawer, if the drawer could not suffer damage from the want of such presentment.
Section 76 NI Act in Simple Words
Section 76 NI Act sets out the situations in which no presentment for payment is necessary and the instrument is dishonoured at the due date for presentment. The section divides these situations into four clauses, labeled (a), (b), (c), and (d), with specific qualifiers in clauses (b), (c), and (d) limiting which parties can be charged without presentment.
Under Section 76(a) NI Act, presentment for payment is unnecessary in four cases involving the maker, drawee, or acceptor: first, if the maker, drawee, or acceptor intentionally prevents the presentment of the instrument; second, if the instrument is payable at the place of business of the maker, drawee, or acceptor, and that party closes that place on a business day during the usual business hours; third, if the instrument is payable at some other specified place, and neither the maker, drawee, or acceptor nor any person authorized to pay the instrument attends at that place during the usual business hours; fourth, if the instrument is not payable at any specified place, and the maker, drawee, or acceptor cannot, after due search, be found.
Under Section 76(b) NI Act, no presentment for payment is necessary as against any party sought to be charged with the instrument, if that party has engaged to pay notwithstanding non-presentment. Under Section 76(c) NI Act, no presentment for payment is necessary as against any party if, after maturity, with knowledge that the instrument has not been presented, that party makes a part payment on account of the amount due on the instrument, promises to pay the amount due on the instrument in whole or in part, or otherwise waives the right to take advantage of any default in presentment for payment.
Under Section 76(d) NI Act, no presentment for payment is necessary as against the drawer, if the drawer could not suffer damage from the want of such presentment. In each of these cases under Section 76 NI Act, the instrument is dishonoured at the due date for presentment without presentment for payment being required.
When Section 76 NI Act Applies
- Under Section 76(a) NI Act, the maker, drawee, or acceptor intentionally prevents presentment, closes the place of business (where the instrument is payable there) on a business day during usual business hours, fails personally and through any authorized person to attend at some other specified payment place during usual business hours, or cannot after due search be found when no place is specified.
- Under Section 76(b) NI Act, as against a party sought to be charged, that party has engaged to pay notwithstanding non-presentment.
- Under Section 76(c) NI Act, as against a party, after maturity and with knowledge that the instrument has not been presented, that party makes a part payment on account of the amount due, promises to pay the amount due in whole or in part, or otherwise waives the right to take advantage of any default in presentment for payment.
- Under Section 76(d) NI Act, as against the drawer, the drawer could not suffer damage from the want of presentment.
- When any of Clauses (a) to (d) applies, no presentment for payment is necessary and the instrument is dishonoured at the due date for presentment.
Example of Section 76 NI Act
FAQs on Section 76 NI Act
What is Section 76 NI Act?▼
Section 76 NI Act lists four categories of cases in which no presentment for payment is necessary. When any of those cases applies, the instrument is dishonoured at the due date for presentment without presentment being made.
What happens under Section 76(a) NI Act if the maker closes the place of business where the instrument is payable during usual business hours on a business day?▼
No presentment for payment is necessary, and the instrument is dishonoured at the due date for presentment. Section 76(a) NI Act specifically covers closing the place of business on a business day during the usual business hours when the instrument is payable at that place.
Does a promise to pay after maturity excuse non-presentment under Section 76(c) NI Act if the party did not know the instrument was not presented?▼
No. Section 76(c) NI Act applies only if the part payment, promise to pay, or waiver is made after maturity and with knowledge that the instrument has not been presented.
Against whom is presentment unnecessary under Section 76(d) NI Act when the drawer could not suffer damage from the want of presentment?▼
As against the drawer only. Section 76(d) NI Act expressly limits this rule to operating 'as against the drawer'.
What if an instrument is not payable at any specified place and the maker, drawee, or acceptor cannot be found?▼
No presentment for payment is necessary if the maker, drawee, or acceptor cannot be found after due search. Under Section 76(a) NI Act, the instrument is then dishonoured at the due date for presentment.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·