According to Section 99 of the Negotiable Instrument Act, 1881 when a promissory note or bill of exchange has been dishonored by non-acceptance or non-payment, the holder may cause such dishonor to be noted by a notary public upon the instrument, or upon a paper attached thereto, or partly upon each, such note must be made within a reasonable time after dishonor and must specify the date of dishonor, the reason, if any assigned for such dishonor, or if the instrument has not been expressly dishonored, the reason why the holder treats it as dishonored, and the notary’s charges
2) Protest
As per Section 100 of the said Act, when a promissory note or bill of exchange has been dishonored by non-acceptance or non-payment, the holder may, within a reasonable time, cause such dishonor to be noted and certified by a notary public. Such a certificate is called a protest.
3) 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, with a reasonable time, cause such facts to be noted and certified as aforesaid. Such certificate is called a protest for better security.
4) Contents of protest (Section 101) –
A protest under section 100 must contain,-
(a) either the instrument itself or a literal transcript of the instrument and of everything written or printed thereupon;
(b) the nature of the person for whom and against whom the instrument has been protested;
(c) a statement that payment or acceptance, or better security, as the case may be, has been demanded of such person by the notary public; the terms of his answer, if any, or a statement that he gave no answer, or that he could not be found;
(d) when the note or bill has been dishonored, the place and time of dishonor, and, when better security has been refused, the place and time of refusal;
(e) the subscription of the notary public making the protest;
(f) in the event of an acceptance for honor or of a payment for honor, the name of the person by whom, of the person for whom, and the manner in which, such acceptance or payment was offered and effected.
A notary public may make the demand mentioned in clause (c) of this section either in person or by his clerk or, where authorized by agreement or usage, by registered letter.
Notice of protest –
According to Section 102 when a promissory note or bill of exchange is required by law to be protested, a notice of such protest must be given instead of notice of dishonor, in the same manner and subject to the same conditions; but the notice may be given by the notary public who makes the protest.
Protest for non-payment after dishonor by non-acceptance
As per Section 103 of the said Act, all bills of exchange drawn payable at some other place than the place mentioned as the residence of the drawee, and which are dishonored by non-acceptance, may, without further presentment to the drawee, be protested for non-payment, in the place specified for payment, unless paid before or at maturity.
Protest of foreign bills (Section 104) –
Foreign bills of exchange must be protested for dishonor when such a protest is required by the law of the place where they are drawn.
When noting equivalent to protest
For the purposes of this Act, where a bill or note is required to be protested within a specified time or before some further proceeding is taken, it is sufficient that the bill has been noted for a protest before the expiration of the specified time or the taking of the proceeding; and the formal protest may be extended at any time thereafter as of the date of the noting. (Section 104A.)
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