What is the presumption relating to the time of acceptance?

The presumption relating to the time of acceptance is contained in Section 118(c) of the Negotiable Instruments Act, 1881 — one of the several presumptions that Chapter XIII erects in favour of negotiable instruments to facilitate commerce and reduce the burden of proof on those who rely upon them.

The Presumption — Section 118(c)

The precise language of the provision is:

"Until the contrary is proved, the following presumptions shall be made — (c) as to time of acceptance — that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity."

This presumption operates in a straightforward but commercially vital manner. When a bill of exchange is presented in court bearing an acceptance, the law presumes, without requiring any further proof, that the acceptance was made within a reasonable time after the date of the bill and before the bill reached its maturity.

What the Presumption Does and Does Not Assume

It is important to understand precisely what Section 118(c) presumes and what it does not. As the law is stated plainly: the presumption is that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity — but there is no presumption as to the exact date of its acceptance.

The presumption does two things simultaneously. First, it places the acceptance within the temporal zone that runs from the date of drawing the bill up to the date of its maturity. An acceptance that comes after maturity is not simply late — it defeats the commercial purpose of the bill entirely, for the obligation to pay would already have fallen due. Second, it affirms that the acceptance occurred within a reasonable time after the bill's date. This is significant because a bill accepted long after its date but still before maturity might, in unusual circumstances, tell a story of delay or irregularity that could affect prior parties. The law presumes neither of these adverse situations has occurred.

The Nature of the Presumption

Like all presumptions under Section 118, this is a presumption of law — not merely a presumption of fact under Section 114 of the Evidence Act. The distinction is fundamental in practice. A presumption of fact is permissive; the court may draw it or decline to draw it depending upon the circumstances. A presumption of law under Section 118 is mandatory — the court shall presume the fact until the contrary is proved. As the Supreme Court explained in MS Narayana Menon v State of Kerala (AIR 2006 SC 3366), the court has no option but to raise the presumption as soon as the factual foundation is established.

The presumption is, however, rebuttable. The words "until the contrary is proved" in Section 118 make clear that the person against whom the presumption operates may displace it by leading evidence — direct or circumstantial — to show either that the acceptance was made after maturity, or that it was not made within a reasonable time after the date of the bill.

Why This Presumption Matters

The commercial reason for this presumption is closely tied to the very nature of a bill of exchange. A bill accepted after maturity is commercially worthless as a vehicle of trade, for it cannot be discounted or transferred in the ordinary course of business. Every person who takes a bill in the course of commerce needs assurance that the acceptance was regular. Since the exact date of acceptance is rarely written on the bill — unlike the date of drawing — requiring proof of the precise timing of acceptance in every case would create unnecessary litigation and impede negotiability. The law therefore presumes regularity and casts the burden of proving otherwise upon the party who asserts irregularity.

The presumption under Section 118(c) must also be read alongside Section 118(b), which presumes that every negotiable instrument bearing a date was made or drawn on that date. As was affirmed in Fulchand v Laxminarayan (AIR 1952 Ngp 308), the two presumptions in clauses (b) and (c) are independent of each other — if one is displaced, the other does not automatically fall. The fact that the date of drawing is called in question does not, by itself, bring down the presumption as to the timing of acceptance.

A Practical Illustration

Consider a bill dated 1st January 2025 and made payable three months after date — that is, maturing on 1st April 2025. The bill is produced in court bearing the drawee's acceptance, but there is no date recorded on the acceptance itself. The court will presume — without any evidence from the holder — that the acceptance was obtained sometime between 1st January and 1st April 2025, and within a reasonable time after 1st January. If the acceptor wishes to escape liability by arguing that he accepted only after maturity — say, on 10th April 2025 — the burden is entirely upon him to prove that fact.

The presumption is therefore a practical shield that the holder of an accepted bill may rely upon in court, relieving him of having to trace and prove the precise date of acceptance in every case — a task that is often impossible given that accepted bills routinely pass through several hands before a dispute arises.