Sections 113-116 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 113 to 116 give two more ways in which a bill of exchange can be saved after trouble: a third person can pay it for the honour of a party, and a "drawee in case of need" named on the bill can be asked to step in. As per the consolidated text consulted, there are four short sections.
When a bill has been noted or protested for non-payment, any person may pay it for the honour of any party liable on it, provided the payer (or his agent) has previously declared before a notary public the party for whose honour he pays and that declaration has been recorded by the notary (s.113). The payer takes the holder's rights and may recover the sums paid, with interest and proper expenses, from the party honoured (s.114). Where a drawee in case of need is named, the bill is not dishonoured until he too has dishonoured it (s.115), and he may accept and pay without previous protest (s.116).
How these sections fit
Acceptance for honour, covered in Sections 108 to 112, works before maturity on a bill refused acceptance. Payment for honour comes later, after non-payment, and involves actual payment, not only a promise. Both rest on noting and protest. The drawee in case of need is introduced among the parties in Section 7.
These sections concern bills of exchange. They do not mention cheques, and the text gives no fee or form. If you hold a bill that has been dishonoured and a third party offers to pay for honour, a legal consultation can help you check the steps before money moves. A note on spelling: the Act writes "indorse"; "endorse" is the common spelling.
Section 113: payment for honour
The text says: "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". The proviso then sets a condition: 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." The copy prints "payingor", with the words joined; it is a printing slip.
Compare this with Section 108. Acceptance for honour is limited to a person not already liable and needs the holder's consent. Section 113 says "any person" and does not mention the holder's consent. The text is silent on whether a person already liable on the bill may pay for honour under this section, and it should not be read as saying yes or no.
The key safeguard is the prior declaration before a notary public, recorded by the notary. Without it the payment is not a payment for honour within the section. The declaration names the party being honoured.
Section 114: rights of the 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."
Two entitlements:
- The holder's rights. The payer for honour steps into the shoes of the holder as at the time of payment.
- Recovery from the party honoured. He may recover all sums paid, with interest and all expenses properly incurred in making the payment. The text does not state a rate of interest in Section 114. (A rate of eighteen per centum per annum appears in Section 117(c) for a different situation; see our article on Section 117. Do not read that rate into Section 114.)
Section 115: drawee in case of need
"Where a drawee in case of need is named in a bill of exchange, or in any indorsement thereon, the bill is not dishonoured until it has been dishonoured by such drawee."
So if the bill (or an indorsement on it) names a drawee in case of need, dishonour by the first drawee is not the end: the bill is dishonoured only after the drawee in case of need also dishonours it. This matters for the holder's timetable for notice and protest.
Section 116: acceptance and payment without protest
"A drawee in case of need may accept and pay the bill of exchange without previous protest." Unlike a payer for honour under Section 113, who works after noting or protest, the drawee in case of need may act without protest first.
Summary table
| Section | Who | What the text allows or requires |
|---|---|---|
| 113 | Any person | Pay a bill noted or protested for non-payment for the honour of any party liable; payer or agent must have previously declared the party honoured before a notary, and the notary must have recorded it |
| 114 | Payer for honour | Has the holder's rights at the time of payment; may recover sums paid with interest and proper expenses from the party honoured |
| 115 | Drawee in case of need | Bill is not dishonoured until dishonoured by him |
| 116 | Drawee in case of need | May accept and pay without previous protest |
A worked example
Example. Imran Exports draws a bill on Foster Trading, payable to Gill Distributors, who indorses it to Hegde Capital. A "drawee in case of need", Joshi Agencies, is named on the bill. Foster Trading refuses to pay at maturity. Under Section 115 the bill is not yet dishonoured, because Joshi Agencies has not dishonoured it; Joshi Agencies may accept and pay without any previous protest (Section 116). If Joshi Agencies also declines and the bill is protested for non-payment, a friend of Gill Distributors, Kapoor Associates, wants to pay to protect Gill Distributors' name. Before paying, Kapoor Associates (or its agent) declares before a notary public that it pays for the honour of Gill Distributors, and the notary records the declaration. After paying Hegde Capital, Kapoor Associates has Hegde Capital's rights on the bill and may recover the sum paid, with interest and proper expenses, from Gill Distributors (Section 114).
Points to watch
- Order of steps. In Section 113, the declaration before the notary comes first ("previously declared"), and then the payment.
- Written record. The declaration must be "recorded by such notary public".
- Interest rate. Section 114 states none.
- Who is "party honoured". The payer's recovery is from the party for whose honour he pays; a party who has not been named is not the target of that claim.
- Drawee in case of need. Check whether the bill, or any indorsement, names one. If so, the holder should deal with that drawee before treating the bill as dishonoured.
Need help with a dishonoured bill?
A bill that is protested, offered for honour or addressed to a drawee in case of need needs careful sequencing. A legal consultation can help you map the order of steps against the text.
Key takeaways
- Any person may pay a bill noted or protested for non-payment for the honour of a party, if he or his agent has first declared before a notary the party honoured and the notary has recorded it.
- The payer for honour has the holder's rights and may recover sums paid, with interest and proper expenses, from the party honoured.
- A bill naming a drawee in case of need is not dishonoured until that drawee dishonours it.
- A drawee in case of need may accept and pay without previous protest.
Read next
- Sections 108 to 112: acceptance for honour
- Section 117: compensation on dishonour of a negotiable instrument
- Sections 99 and 100: noting and protest by a notary public
- Types of negotiable instruments: cheque, bill, promissory note
Disclaimer: Based on a consolidated text of the Negotiable Instruments Act, 1881 stating the position as of 26 December 2015 and on the Negotiable Instruments (Amendment) Act, 2018, as consulted on 2 October 2026. Later amendments and current criminal procedure law should be checked. This article is general information, not legal advice; check the official text before acting.