Home  /  Negotiable Instruments Act  /  Section 139

Section 139: Presumption in favour of holder

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Presumption
Reverse Burden of Proof
JMFC / MM
Act 1881
Section 138 All 148 Sections of Negotiable Instruments Act Section 140

Legal Commentary & Landmark Judgments: Section 139

Section 139 creates a mandatory statutory reverse presumption in favour of the holder, enacting that it shall be presumed, unless the contrary is proved, that the holder received the cheque for the discharge of a legally enforceable debt or other liability.

  • Mandatory 'Shall Presume' Reverse Burden: Once execution and signature on the cheque are admitted or proved, the court is legally bound to presume that the cheque was issued for a valid debt.
  • Extends to Existence of Debt: Supreme Court in Rangappa settled that the presumption is not confined to execution, but expressly encompasses the existence of a legally enforceable debt.
  • Standard of Rebuttal (Preponderance of Probabilities): The accused does not need to prove innocence beyond reasonable doubt; raising a probable defence by cross-examining the complainant or showing lack of financial capacity suffices.
Key Landmark Precedents:
  • Bir Singh v. Mukesh Kumar (2019) 4 SCC 197: The Supreme Court affirmed that even if a blank cheque leaf is voluntarily signed and handed over by the drawer, the presumption under Section 139 is attracted, and the payee has prima facie authority to fill up the details.
  • Kalamani Tex v. P. Balasubramanian (2021) 5 SCC 283: Reiterated that once the signature on the cheque is admitted, the court is legally bound to presume that the cheque was issued for the discharge of a debt or liability.
  • Basalingappa v. Mudibasappa (2019) 5 SCC 418: The Supreme Court laid down the definitive guidelines for rebutting Section 139: the accused can question the complainant's financial capacity and sources of income without stepping into the witness box.
  • Triyambak S. Hegde v. Sripad (2022) 1 SCC 742: Affirmed that mere denial or vague assertions by the accused are insufficient; tangible evidence or effective cross-examination is required to displace the presumption.
Courtroom Practice & Strategic Litigation Guidance:

Section 139 dictates trial strategy in every cheque bounce case. Complainant's counsel should establish the signature and bank memo, and then rely on Section 139 without over-complicating evidence in chief. Defence counsel must cross-examine the complainant on income tax returns (ITRs), cash balance, and absence of written loan agreements to rebut the presumption on a preponderance of probabilities under Basalingappa.

Section 138 All 148 Sections of Negotiable Instruments Act Section 140