Presentment requirement: presentment is generally necessary to charge other parties; part payment only waives presentment with knowledge.

The note clarifies three legal points: first, an interim court order limiting creditor payments to 60% did not bar creditors from satisfying claims by adjustment against the company's debtors, so such adjustments were permitted outside the 60% cap. Second, transfers by the bank were not fraudulent preferences because they were made outside the temporal mischief drawn from insolvency law and thus did not fall within the doctrine of fraudulent preference. Third, presentment is generally required to charge parties other than the acceptor or maker; part payment removes presentment only if the payer knew presentment had not occurred, burden of proof on the payer.

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Issues: (i) Whether the Bank's transfers by adjustment were prohibited by this Court's interim order limiting payments to creditors to 60 per cent; (ii) Whether the transfers by the Bank constituted a fraudulent preference within the meaning of Section 231, Companies Act; (iii) Whether non-presentation of the bills under Section 64, Negotiable Instruments Act absolved the drawer or acceptor of liability and the effect of part payment under Section 76(e);

Issue (i): Whether the Supreme Court's interim order dated 27-3-1947 restricted satisfaction of creditors' claims by adjustment against dues of the Company to 60 per cent.

Analysis: The order distinguished payments to creditors (limited to 60 per cent) from satisfaction of claims by adjustment against dues of the Company from its debtors, which the order permitted without the 60 per cent limitation. The language granting liberty "to satisfy their respective claims by adjustment against dues of the said Company from its debtors or otherwise" was interpreted to allow adjustments without the 60 per cent cap.

Conclusion: The transfers by adjustment were not prohibited by the interim order; the 60 per cent limit did not apply to adjustments.

Issue (ii): Whether the transfers amounted to a fraudulent preference under Section 231, Companies Act.

Analysis: Section 231 imports the concept of fraudulent preference from individual insolvency law; Section 54 of the Provincial Insolvency Act treats payments made within three months before adjudication as fraudulent preferences. The transfers in the present cases were not made within three months preceding the winding up petition and therefore do not fall within the mischief of Section 231.

Conclusion: The transfers do not constitute a fraudulent preference under Section 231; Section 231 does not apply to the transfers in these cases.

Issue (iii): Whether failure to present the bills for payment under Section 64, Negotiable Instruments Act relieves the drawer or acceptor of liability, and whether part payment under Section 76(e) removes the need for presentment.

Analysis: Section 64 requires presentment to maker, acceptor or drawee and renders other parties liable only if presentment is made; "other parties" in the context of a bill of exchange means parties other than the acceptor. The Court rejected the contrary view that would render presentment unnecessary to charge other parties or bankers. As to part payment under Section 76(e), presentment remains unnecessary only if, at the time of part payment, the party making payment had knowledge that presentment had not been made; the burden of proving such knowledge rests on the party relying on waiver.

Conclusion: Non-presentation disentitles the holder from charging other parties unless presentment is excused; in Appeal No.137 the drawer Manick Ratan Guin is discharged for want of presentment while liability may remain as to other parties where presentment was proper or presentment was excused with requisite knowledge; part payment does not dispense with presentment unless the payer had knowledge of non-presentation.

Final Conclusion: The appeals are finally disposed by allowing Appeal No.137 of 1949 in part (setting aside the decree against Manick Ratan Guin and dismissing the suit as against him while affirming the decree against the other appellant subject to instalment directions) and dismissing Appeal No.136 of 1949; the legal effect is a mixed result with relief granted to the appellants in part.

Ratio Decidendi: "Other parties" in Section 64 of the Negotiable Instruments Act means parties other than the acceptor (in bills of exchange) and other than the maker (in promissory notes), thus presentment is generally necessary to charge those other parties unless presentment is excused under statutory exceptions such as established part payment coupled with knowledge of non-presentation.

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