Home  /  Negotiable Instruments Act  /  Section 116

Section 116: Acceptance and payment without protest

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 115 All 148 Sections of Negotiable Instruments Act Section 117

Legal Commentary & Landmark Judgments: Section 116

Section 116 provides that a bill of exchange cannot be accepted or paid by a drawee in case of need until it has been formally protested for non-acceptance or non-payment.

  • Mandatory Pre-condition of Protest: Resort cannot be had to the drawee in case of need until the original drawee's default is authenticated by protest.
  • Sequential Order of Demand: The holder cannot approach the referee in case of need directly without first presenting and protesting against the primary drawee.
  • Protection for Drawer: Prevents unnecessary activation of secondary financing costs until primary default is certified.
Key Landmark Precedents:
  • Holdsworth v. Hunter (1830) 10 B & C 449: Established that presentment to a drawee in case of need without prior notarial protest of the original drawee's refusal is legally premature.
  • Mitchell v. Baring (1829): Affirmed that the condition of protest under Section 116 is an indispensable prerequisite under mercantile law.
Courtroom Practice & Strategic Litigation Guidance:

If a trade bill designates an emergency drawee, do not rush to present it to them immediately upon the buyer's verbal refusal. Execute a formal notarial protest under Section 100 first; only then present to the drawee in case of need under Section 116.

Section 115 All 148 Sections of Negotiable Instruments Act Section 117