BACK TO NI Act 1881
NI Act 1881
Section 139
Presumption in Favour of Holder
THE STATUTE
Original Text
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Legal Commentary
Section 139 is the evidentiary backbone of every Section 138 prosecution. Without it, the complainant would have to independently prove — in every single case — that money was lent, goods were supplied, or services were rendered before the cheque was given. The presumption eliminates this burden: once the cheque is presented and its dishonour is proved, the court *must* presume (not merely *may* presume) that it was given for a legally enforceable debt.
**'Shall presume' — mandatory language:** The word 'shall' in Section 139 is critical. It is not a discretionary presumption — the court has no choice but to apply it once the basic facts (cheque, dishonour, notice, non-payment) are established. This distinguishes Section 139 from permissive presumptions, where the court has latitude.
**What the accused must do to rebut:** The accused must prove 'the contrary' — i.e., that no legally enforceable debt existed when the cheque was issued. The standard of proof is balance of probabilities (civil standard), not beyond reasonable doubt. However, the accused cannot rebut merely with a bare denial. In Rangappa v. Sri Mohan (2010), the Supreme Court held that the accused must bring cogent evidence — circumstances consistent with their version, documentary evidence, or testimony — to shift the balance. A self-serving statement that 'the cheque was given as security' without any supporting material will not suffice.
**'Legally enforceable' — what debts qualify:** The debt must be legally enforceable at the time the cheque was given. A time-barred debt is not legally enforceable — a cheque given to pay a time-barred debt may not sustain Section 138 prosecution (though courts have taken varying positions). An illegal debt (gambling debt, usurious loan beyond permissible rates) is not legally enforceable. A moral obligation without legal force does not qualify.
**Interplay with Section 118:** Section 139 is a specific presumption for Section 138 proceedings. The general presumptions in Section 118 (including presumption of consideration under clause (a)) also operate simultaneously. Together, they create a comprehensive presumptive framework favouring the complainant that the accused must systematically dismantle.
**Practical impact:** Because of Section 139, the typical Section 138 trial involves the complainant proving the basic ingredients (cheque, dishonour, notice, non-payment) and then the accused trying to prove the negative — that no enforceable debt existed. This reversal of the normal criminal burden (which rests on the prosecution) is a deliberate legislative choice to give teeth to the cheque dishonour law.
Questions & Answers
Section 139 creates a mandatory presumption that the holder of the cheque received it for the discharge of a legally enforceable debt or liability. The court *must* apply this presumption once the basic cheque bounce ingredients are proved — it is not discretionary. The accused then has to rebut it.
Balance of probabilities — the civil standard, not the criminal standard (beyond reasonable doubt). The accused must produce cogent evidence — documentary, circumstantial, or testimonial — that makes it more probable than not that no enforceable debt existed. Bare denial is insufficient.
It depends. If the cheque was given as security for a legally enforceable obligation (present or contingent), Section 139 applies. If the cheque was given as pure security with no underlying enforceable obligation at all, the accused can try to rebut the presumption. The Supreme Court in Bir Singh v. Mukesh Kumar (2019) held that a security cheque for a contingent enforceable liability still falls under Section 139.
Section 118 contains general presumptions applicable to all negotiable instruments — including presumption of consideration (clause a), presumption of date (clause b), and presumption of time of acceptance. Section 139 is a specific presumption inserted in 1988 specifically for Section 138 proceedings, presuming the cheque was for a legally enforceable debt. Both apply simultaneously in Section 138 prosecutions.
Possibly. A time-barred debt is not 'legally enforceable' in the strict sense — the creditor cannot sue for it. Several High Courts have held that a cheque given for a time-barred debt cannot attract Section 138 liability because no 'legally enforceable debt' exists. However, the Supreme Court has not definitively settled this, and some courts take the view that the drawer cannot benefit from their own delay in repayment.