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Section 137: Presumption as to foreign law

Negotiable Instruments Act • Official Statutory Text & Practice Guide

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Act 1881
Section 136 All 148 Sections of Negotiable Instruments Act Section 138

Legal Commentary & Landmark Judgments: Section 137

Section 137 enacts a statutory presumption as to foreign law, providing that the law of any foreign country regarding promissory notes, bills of exchange, and cheques shall be presumed to be the same as that of India, unless the contrary is proved.

  • Presumption of Legal Identity: Foreign commercial paper law is presumed identical to Indian negotiable instruments law until affirmative contrary evidence is introduced.
  • Burden of Proof on Challenger: The party relying on an alleged foreign law difference or defense bears the strict evidentiary burden of pleading and proving foreign law as a fact.
  • Proof by Expert Evidence: Foreign law must be proved under Section 45 of the Indian Evidence Act / Section 39 BSA by examining qualified foreign legal experts or producing official authoritative codes.
Key Landmark Precedents:
  • Hari Shanker v. Kailash Narayan (AIR 1982 MP 47): The High Court affirmed that foreign law is a question of fact in Indian courts; under Section 137, Indian courts apply Indian commercial law unless foreign law is formally proved.
  • Mostyn v. Fabrigas (1774) 1 Cowp 161: Lord Mansfield's celebrated principle that foreign law is presumed identical to the lex fori until established otherwise by expert proof.
Courtroom Practice & Strategic Litigation Guidance:

In litigation involving foreign promissory notes or letters of credit, plaintiff's counsel can rely safely on Section 137 without expending money on foreign legal experts. If the defendant claims 'foreign law requires 7 days notice', the defendant must hire and produce foreign legal experts; if they fail, the court applies Indian law under Section 137.

Section 136 All 148 Sections of Negotiable Instruments Act Section 138