Section 114 NI Act: Right of payer for honour

Negotiable Instruments Act, 1881

Section 114 NI Act at a Glance

Section 114 NI Act gives a person who pays a bill of exchange for honour all the rights of the holder at the time of payment. The payer may recover from the honoured party the sum paid, interest, and proper payment expenses.

Section 114 NI Act Bare Act Text

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.

Section 114 NI Act in Simple Words

Section 114 NI Act sets out the rights of a person who makes a payment for honour in accordance with Section 113 NI Act.

First, any person so paying is entitled to all the rights, in respect of the bill of exchange, that the holder had at the time of that payment.

Second, Section 114 NI Act states what the payer for honour may recover from the party for whose honour the payment was made. The payer for honour may recover all sums so paid, together with interest on those sums and all expenses properly incurred in making that payment.

When Section 114 NI Act Applies

A person pays a bill of exchange for honour as provided under Section 113 NI Act.
The payer for honour acquires all the rights in respect of the bill that the holder had at the time of that payment.
The payer for honour may recover from the party for whose honour the payment was made all sums so paid, interest on those sums, and all expenses properly incurred in making the payment.

Example of Section 114 NI Act

Following the dishonour and protest for non-payment of a ₹1,00,000 bill of exchange in Meerut, Mahesh makes a prior declaration before a notary public and pays ₹1,00,000 to the holder, Kamala, for the honour of Sunil, an indorser on the bill, while properly incurring ₹1,500 in notary expenses. Under Section 114 NI Act, Mahesh is entitled to all the rights in respect of the bill that Kamala had as holder at the time of payment. Mahesh may also recover from Sunil the ₹1,00,000 paid, interest on that sum, and the ₹1,500 properly incurred in making the payment.

FAQs on Section 114 NI Act

What is Section 114 NI Act?▼

Section 114 NI Act defines the legal rights of a person who pays a bill of exchange for honour. The payer for honour receives all the rights of the holder at the time of payment and may recover from the honoured party all sums paid, interest, and all expenses properly incurred in making the payment.

What amounts can a payer for honour recover from the honoured party under Section 114 NI Act?▼

All sums paid, interest, and proper expenses. Under Section 114 NI Act, the payer for honour may recover from the party for whose honour the payment was made all sums so paid, with interest on those sums and all expenses properly incurred in making the payment.

Whose rights on the bill does the payer for honour acquire under Section 114 NI Act?▼

The rights of the holder at the time of payment. Section 114 NI Act states that any person so paying is entitled to all the rights in respect of the bill of the holder at the time of such payment.

Who qualifies as 'any person so paying' under Section 114 NI Act?▼

A person who pays a bill of exchange for honour under Section 113 NI Act.

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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) ·