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Section 114: Right of payer for honor

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 113 All 148 Sections of Negotiable Instruments Act Section 115

Legal Commentary & Landmark Judgments: Section 114

Section 114 defines the rights of a payer for honour, enacting that any person paying a bill for honour succeeds to all the rights and remedies of the holder as regards the party for whose honour they paid and all parties liable to that party.

  • Full Statutory Subrogation: The payer for honour steps into the shoes of the holder and acquires all their rights and remedies.
  • Recourse Against Prior Parties: May recover the entire amount paid, plus interest and noting expenses, from the party for whose honour paid and all prior parties.
  • Right to Surrender of Paper: Entitled to receive the physical bill, protest certificate, and notarial act of honour upon payment.
Key Landmark Precedents:
  • Ex parte Swan (1868) LR 6 Eq 344: Held that a payer for honour acquires the unassailable title of the holder under Section 114, entitling them to prove the full debt in insolvency.
  • Goodall v. Polhill (1845) 1 CB 233: Affirmed that the payer for honour can maintain summary recovery actions against the maker and prior indorsers.
Courtroom Practice & Strategic Litigation Guidance:

Payer for honour rights under Section 114 provide complete financial security for merchant banks rescuing transactions. Retain the original bill, protest certificate, and notarial receipt to maintain summary recovery suits under Order XXXVII CPC.

Section 113 All 148 Sections of Negotiable Instruments Act Section 115