Section 100 NI Act: Protest

Negotiable Instruments Act, 1881

Section 100 NI Act at a Glance

Section 100 NI Act explains when the holder of a dishonoured promissory note or bill of exchange can get a notary public's certificate of dishonour, called a protest, and when a holder can obtain a protest for better security before a bill's maturity.

Section 100 NI Act Bare Act Text

100. Protest.

When a promissory note or 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 notary public. Such certificate is called a protest.

Protest for better security.—When the acceptor of a bill of exchange has become insolvent, or his credit has been publicly impeached, before the maturity of the bill, the holder may, within a reasonable time, cause a notary public to demand better security of the acceptor, and on its being refused may, within a reasonable time, cause such facts to be noted and certified as aforesaid. Such certificate is called a protest for better security.

Section 100 NI Act in Simple Words

Section 100 NI Act defines two kinds of certificates issued by a notary public: a protest for dishonour and a protest for better security.

Under the first paragraph of Section 100 NI Act, when a promissory note or a bill of exchange has been dishonoured by non-acceptance or by non-payment, the holder may, within a reasonable time, cause that dishonour to be noted and certified by a notary public. The certificate issued by the notary public is called a protest.

Under the second paragraph of Section 100 NI Act, if the acceptor of a bill of exchange becomes insolvent, or the acceptor's credit is publicly impeached, before the maturity of the bill, the holder may, within a reasonable time, cause a notary public to demand better security from the acceptor. If better security is refused, the holder may, within a reasonable time, cause those facts to be noted and certified by a notary public in the same manner. That certificate is called a protest for better security.

When Section 100 NI Act Applies

  • For a protest on dishonour: a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment.
  • The holder, within a reasonable time, causes a notary public to note and certify the dishonour.
  • For a protest for better security: the acceptor of a bill of exchange becomes insolvent, or the acceptor's credit is publicly impeached, before the maturity of the bill.
  • The holder, within a reasonable time, causes a notary public to demand better security from the acceptor.
  • On better security being refused, the holder, within a reasonable time, causes a notary public to note and certify those facts.

Example of Section 100 NI Act

Rajiv is the holder of a bill of exchange for ₹2,00,000 accepted by Faisal in Udaipur, payable three months after date. Before the maturity of the bill, Faisal becomes insolvent. Within a reasonable time, Rajiv causes a notary public in Udaipur to demand better security from Faisal. Faisal refuses to give better security, so Rajiv, within a reasonable time, causes the notary public to note and certify these facts. Under Section 100 NI Act, the notary public's certificate is a protest for better security.

FAQs on Section 100 NI Act

What is Section 100 NI Act?▼

Section 100 NI Act defines a protest and a protest for better security under the Negotiable Instruments Act, 1881. It allows the holder of a dishonoured promissory note or bill of exchange, or the holder of a bill whose acceptor has become insolvent or had credit publicly impeached before maturity, to have the facts noted and certified by a notary public within a reasonable time.

What is a protest under Section 100 NI Act?▼

A certificate issued by a notary public. When a promissory note or bill of exchange is dishonoured by non-acceptance or non-payment, the holder may within a reasonable time cause a notary public to note and certify the dishonour, and that certificate is called a protest under Section 100 NI Act.

When can a holder get a protest for better security under Section 100 NI Act?▼

Before the maturity of a bill of exchange. Under Section 100 NI Act, if the acceptor becomes insolvent or the acceptor's credit is publicly impeached before maturity, the holder may within a reasonable time cause a notary public to demand better security from the acceptor and, on its refusal, cause the facts to be noted and certified.

Does protest for better security under Section 100 NI Act apply to a promissory note?▼

No. The first paragraph of Section 100 NI Act covers both promissory notes and bills of exchange for dishonour, but the second paragraph on protest for better security applies only to a bill of exchange whose acceptor becomes insolvent or has credit publicly impeached before maturity.

Is a protest compulsory for every dishonoured instrument under Section 100 NI Act?▼

No. Section 100 NI Act uses the word "may".

Have questions about Section 100 NI Act?

Ask NyayGuru about your situation and get an answer based on the Negotiable Instruments Act, 1881.

Ask NyayGuru →

Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·