Acceptance of a bill is an indication by the drawee of his assent to pay to the order of the drawer. Oral acceptance is not considered an acceptance.
The Essentials of Acceptance
Acceptance must be written across the face or on the back of the bill and signed by the drawee. The process of acceptance is completed only when the accepted bill is delivered to the holder.
Who can accept (Section 33)
Any of the following can accept a bill:
· The drawee of a bill
· All or some of the several drawees, if the bill is addressed to more than one drawee
· A person named in the bill as drawee in case of need
· An acceptor for honour
· An agent of the persons listed above.
Presentment
Presentment refers to the showing of an instrument to the drawee, acceptor, or maker for acceptance, sight, or payment.
Presentment of Bill of Exchange for Acceptance (Section 61)
Presentment for acceptance is necessary in the following types of bills:
· A bill of exchange payable after sight
· A bill where there is an explicit stipulation that it shall be presented for acceptance.
Presentment: By Whom and To Whom
A bill must be presented by a holder or his authorized agent. And it must be presented to:
· The drawee;
· His authorized agent;
· His legal representative, if the drawee is dead;
· His official receiver or assignee, if he has been adjudged an insolvent; and
· All the drawees, if there are several drawees.
Drawee’s Time for Deliberation (Section 63)
The holder must, if so required by the drawee of a bill of exchange presented to him for acceptance, allow the drawee 48 hours exclusive of public holidays to consider whether he will accept it.
Consequences of Non-presentment
No party to the bill will be liable to the holder, if default is made in presentment.
Presentment for Payment
Practically necessary for every instrument, since no holder may proceed against an acceptor in a court of law, unless he has demanded payment of the bill and the same has been refused. Secondly, in order to charge the other party to a bill in the event of its non-payment, presentment for payment of the bill and notice of dishonour to the parties concerned are necessary.
Presentment for Payment should be made to the acceptor himself or to his authorized agent. It should be made during business hours on a working day.
Noting
It means recording of the fact of dishonour by a Notary Public on the bill, or paper, or on both. Such noting must be made within a reasonable time after dishonour and must specify the date of dishonour, the reason, if any, assigned for such dishonour, and the notary’s charges. It is, in fact, an authentication by the Notary Public that the bill has, in fact, been dishonoured.
Omission to get the instrument noted does not in any way affect the rights of the holder thereon.
Protest
When a bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may, within a reasonable time, cause such dishonour to be noted and certified by a +. Such a certificate issued by the Notary is called the Protest (Section 100).
When a bill of exchange is required by law to be protested, notice of such protest must be given instead of notice of dishonour, preferably by the Notary Public, who makes the protest.
Foreign bills of exchange must be protested for dishonour, when such protest is required by the law of the place where they are drawn (Section 104).
Contents of Protest
The contents of the protest include:
· The instrument itself
· The name of the person for whom and against whom the instrument has been protested
· The fact and the reason for dishonour
· The place and time of dishonour
· The signature of the Notary Public.
A Advantages of Protest
· Protest provides an authentic evidence of dishonour to the drawer or endorsers
· The same is also upheld in courts unless and until such fact is disproved.
