Chapter XI - Of Acceptance and Payment for Honour and Reference in Case of Need
Section 114
Section 114: Rights of a payer for honour
Section 114 gives the person who pays for honour the holder’s then-existing bill rights and a stated recovery claim against the honoured party.
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Need advice on Section 114?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Key rule and applicability
The payer obtains the holder’s rights in respect of the bill as they stand at payment. Recovery from the honoured party includes sums paid, interest and expenses properly incurred in making the payment.
Limits and related provisions
Read “so paying” with the preceding payment-for-honour requirements. The provision does not specify a universal interest rate here, nor does it make every claimed expense recoverable without showing that it was properly incurred.
Hypothetical business example
Hypothetical: after completing section 113’s process, a business pays a bill for a customer’s honour. It retains the bill, payment proof and necessary expense receipts when seeking the sums allowed by section 114.
Practical decision flow
Retain evidence that payment complied with the payment-for-honour process.
Identify the holder’s bill rights at the payment time.
Separate the paid amount, claimed interest and properly incurred payment expenses in the recovery record.
Practical checklist
Do
- Retain evidence that payment complied with the payment-for-honour process.
- Identify the holder’s bill rights at the payment time.
- Separate the paid amount, claimed interest and properly incurred payment expenses in the recovery record.
Avoid
- Read “so paying” with the preceding payment-for-honour requirements. The provision does not specify a universal interest rate here, nor does it make every claimed expense recoverable without showing that it was properly incurred.
Glossary
- Payer for honour
- The person paying through the process to which this section refers.
- Properly incurred expenses
- The qualifying payment expenses allowed by the wording.
Frequently asked questions
Whose bill rights does the payer receive?
The holder’s rights in respect of the bill at the time of payment.
From whom does the stated recovery run?
The party for whose honour the payment is made.
Does this section state a fixed interest rate?
No fixed percentage is specified in section 114 itself; the applicable basis must be assessed separately.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026