Sections 113 and 114 of Negotiable Instruments Act 1881: Payment for Honour and Rights of Payer
Sections 113 and 114 of the Negotiable Instruments Act, 1881 deal with payment for honour after a bill of exchange has been noted or protested for non-payment. They also define the rights acquired by the person who makes such payment.
Section 113 - Payment for Honour
When a bill of exchange has been noted or protested for non-payment, any person may pay the same for the honour of any party liable to pay the same:
Provided that the person so paying or his agent in that behalf has previously declared before a notary public the party for whose honour he pays, and that such declaration has been recorded by such notary public.
Meaning and requirements of Section 113
Section 113 permits payment for honour after a bill of exchange has been noted or protested for non-payment. The payment may be made for the honour of any party who is liable to pay the bill. Before making the payment, however, the payer or the payer's agent must declare before a notary public the party for whose honour the payment is being made, and the notary public must record that declaration.
- The instrument concerned must be a bill of exchange.
- The bill must have been noted or protested for non-payment.
- Any person may make the payment for the honour of a party liable on the bill.
- Before payment, the payer or the payer's agent must identify before a notary public the party for whose honour payment is made.
- The notary public must record the declaration.
Section 114 - Right of Payer for Honour
Any person so paying is entitled to all the rights, in respect of the bill, of the holder at the time of such payment, and may recover from the party for whose honour he pays all sums so paid, with interest thereon and with all expenses properly incurred in making such payment.
Rights acquired by the payer for honour
Section 114 places the payer for honour in the position of the holder, in respect of the bill, to the extent provided by the section. The payer may also recover from the party for whose honour payment was made the amount paid, interest on that amount and expenses properly incurred in making the payment.
- The payer acquires all rights in respect of the bill that the holder had at the time of payment.
- The payer may recover the sums paid from the party for whose honour payment was made.
- Interest on the amount paid is recoverable.
- Properly incurred expenses connected with making the payment are also recoverable.
How Sections 113 and 114 Work Together
Section 113 creates the statutory mechanism for payment for honour and requires the party honoured to be declared before a notary public before payment. Section 114 provides the legal consequences of that payment by transferring the holder's rights in respect of the bill to the payer for honour and creating a right of recovery against the party for whose honour payment was made.
Related Provisions
Sections 108 to 112 deal with acceptance for honour, including its form, attribution, liability and the conditions for charging an acceptor for honour. Section 115 deals with a drawee in case of need, while Section 116 addresses acceptance and payment without protest in the circumstances stated there.
Official Statutory Source
The current statutory text of the Negotiable Instruments Act, 1881 may be verified through India Code, the Government of India's official legal database. For litigation, professional advice or statutory interpretation, the official text and applicable amendments should be checked.