Section 25

Section 25 is read alongside the broader cluster of presumptions in Sections 118–122 of the NI Act. Together, these provisions place the burden of proof on the accused in cheque dishonour cases in a manner that significantly aids prosecution. Section 25 specifically creates the presumption that the cheque was drawn for consideration — meaning, the court assumes a legally enforceable debt or liability existed at the time the cheque was given, until the accused proves otherwise. In Section 138 prosecutions, the most common defence is that the cheque was given as 'security' with no underlying debt, or that the debt was already repaid, or that the cheque was stolen/misused. Section 25 means that merely asserting these defences is insufficient — the accused must produce preponderant evidence to rebut the presumption. The standard is 'balance of probabilities' (not 'beyond reasonable doubt'), but the accused must do more than raise a bare denial. The Supreme Court in Rangappa v. Sri Mohan (2010) comprehensively explained the interplay between Section 25 (presumption of consideration), Section 118 (general presumptions), and Section 139 (presumption of legally enforceable debt). The Court held that once the complainant proves the cheque signature is the accused's, all presumptions arise simultaneously — the accused must rebut each one. A bare denial unsupported by circumstances or documentary evidence will fail. Practically, Section 25 means that the accused cannot simply say 'I gave this cheque as security, not for any debt' — they must explain what security arrangement existed, why it was not documented, and produce circumstances consistent with their version. Courts are rightly sceptical of undocumented 'security cheque' claims because they are the most commonly used defence.