Protest is a formal certificate issued by the Notary public to the holder of the bill on his demand the Certificate contains all the relevant particulars. This Certificate evidences the dishonour.
Both ‘noting’ and ‘protesting’ are compulsory in the case of foreign bills and are optional in the case of inland bills. Noting, unless followed by protest, does not afford any evidence of presentment or dishonour, even though it may contain the full name of the Notary Public.
Immediately upon the dishonour of a bill, the holder acquires a right of action against the drawer or maker and the endorsers. In order to avail himself of this right, he must (unless excused for giving due notice of dishonour) cause it to be protested, and get all the events noted, on the day of dishonour. Protest is compulsory particularly in the case of foreign bill.
Besides, a protest affords satisfactory evidence of dishonour to the drawer, who, from his residence abroad, might experience a difficulty in making proper inquiries on the subject, and be compelled to rely on the presentation of the holder.
Besides the protest for non-acceptance and for non-payment, the holder may protest the bill for better security. Protest for better security is made where the acceptor becomes bankrupt, or insolvent or suspends payment before the bill falls due. In such cases, the holder may cause a Notary to demand better security, and on its being refused, the bill may be protested, and notice of the protest may be sent to an antecedent party.
Contents of a Protest: Section 101 enumerates the contents of a protest:
1) A protest is required to contain either the instrument itself or a literal transcript (a copy) of it and of everything written or printed thereupon The Section makes no provision when the bill is lost or cannot be had by the holder.
2) The protest is required to contain the name of the party at whose request it is made. It must also contain in the name of the person upon whom demand of payment or of acceptance is made. If the drawee or the acceptor (on whom demand of payment or of acceptance is made) is not present himself, it is always safe to mention the name of the person in charge on behalf of the drawee or the acceptor upon whom demand is made.
3) The protest must also contain the reason given by the drawee or acceptor for non-acceptance or non-payment or refusal to give better security. The protest must also clearly mention whether the demand is made by the Notary Public himself or by the clerk. If the drawee or the acceptor makes no answers, or if he cannot be found at his usual place of business or residence, such fact must also be mentioned in the protest. Normally, greater weight is attached, if the protest is made by the Notary Public himself, because he is a public officer and thereby enjoys credibility.
4) It is also necessary that the time of demand and dishonour should be mentioned in the protest, otherwise it will not be possible to ascertain from it whether the bill was duly dishonoured. Protest can be made later, if nothing is done within a reasonable time.
5) It is further essential that the signature of the Notary should appear on the protest. Though no seal of the Notary is required under the provisions, in practice protests are made under the Notary’s official seal, and the courts take judicial notice of the seal of a Notary Public.
Section 102 lays down that, in cases where notes and bills are required to be protested, notice of protest and not notice of dishonour is to be given. In case of foreign bills, all parties liable in respect thereof against whom the holder intends to proceed are entitled to the notice of protest.
A notice of protest need not contain a copy of the protest. It is enough, if the party to whom notice is issued is informed that the bill has been dishonoured by non-acceptance or non-payment and has been protested.
