Noting and Protest (Indian Law)

Noting: When a promissory Note or Bill of Exchange has been dishonored by non-acceptance or non-payment, the holder may cause such dishonour to be noted by notary public upon the instrument itself, or upon a paper attached therewith, or upon both. Such noting must be made within a reasonable time after dishonour and must contain the following particulars:

(i) the date of dishonour (ii) the reason, if assigned,, for disnonour; (iii) if no reason is assigned, why the instrument is treated as dishonoured and (iv) the noting charges

(Section 99 of the [Indian]Negotiable Instruments Act, 1881)

Protest: 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 dishonour to be noted and certified by a notary public, such certificate is called a protest.

A protest May Be made for two purposes (i) for dishonour (by non acceptance or non-payment) and (ii) for "Better Security". As regards the latter, Section 100 provides that where the acceptor of a bill becomes insolvent or where his credit is publicly challenged before maturity the holder may, within aa reasonable time, cause a notary public to demand better security for the payment of the bill at maturity by the acceptor. If such security is refused, he can, within a reasonable time, cause the bill to be protested for better security, it is not tantamount to a dishonour of a bill. The holder has still to wait, till the time for payment arrives, when, if the amount is not paid, he can proceed as on dishonour of the bill. (Reference: paydia - Principles of Mercantile Law, 8th EDition, Page 289

Notice of protest: When a promissory Note or Bill of Exchange is required by law to be protested, notice of such protest must be given instead of notice of dishonour, in the same manner and subject to the same conditions: but the notice may be given by the notary public who makes the protest.