Presumption in favour of holder
Section 139 of the Negotiable Instruments Act, 1881 deals with presumption in favour of holder. 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. The Act came into force on 01 Mar 1882.
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.
Section 139, The Negotiable Instruments Act, 1881 (Act 26 of 1881).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Rangappa vs Sri Mohan
Court's Decision & Legal Precedent
The statutory presumption mandated by Section 139 of the Negotiable Instruments Act extends to include the existence of a legally enforceable debt or liability. This is a rebuttable presumption, and the standard of proof required for an accused to rebut this presumption is that of 'preponderance of probabilities.' The accused must raise a probable defence that creates reasonable doubts about the existence of a legally enforceable debt or liability - a mere plausible explanation is insufficient. The accused may rely on materials already submitted by the complainant and may not be required to adduce evidence of his own. Stop payment instructions on a post-dated cheque do not exempt the drawer from liability under Section 138 of the Act. The burden of proof is on the accused to demonstrate, on preponderance of probabilities, that the presumption does not apply to the specific facts of the case.
On this section: Presumption in favour of holder - central provision creating rebuttable presumption that cheque holder received cheque for discharge of debt or liability; held that this presumption extends to the existence of a legally enforceable debt; reversed onus clause requiring accused to rebut on preponderance of probabilities.
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Madhav Saran Agarwal vs Msx Mall Pvt. LTD
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings relate to transactions evidencing debt of the corporate debtor and result in depletion of its assets through compensation orders, thereby directly impacting the object of the moratorium which is to preserve the corporate debtor's assets during the insolvency resolution process so it can continue as a going concern and be rehabilitated. However, the moratorium applies only to the corporate debtor and not to natural persons (Directors/officers) in charge of and responsible for the conduct of the business of the corporate debtor, who remain liable to prosecution under Section 138/141 as the corporate debtor is a necessary party to such proceedings.
On this section: Cited to show presumption that cheque received for discharge of debt; burden of proof on accused
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Naresh Kumar Gupta vs Sood Resins and Polymers
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings are 'proceedings' within the meaning of that section. The moratorium applies only to the corporate debtor and not to natural persons (Directors and officers) who can continue to be prosecuted under Section 141 of the Negotiable Instruments Act. The rules of statutory construction (noscitur a sociis and ejusdem generis) cannot be applied to restrict the meaning of 'proceedings' in Section 14(1)(a) when the expression is designedly wide and the object of the statute is clear - which is to preserve the corporate debtor's assets during the insolvency resolution process.
On this section: Analyzed to show that burden of proof is on accused with standard of preponderance of probabilities, not beyond reasonable doubt
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Vishnu Dutt Sharma vs Daya Sapra
Court's Decision & Legal Precedent
The principle of res judicata and the concept of abuse of process of law do not operate to bar continuation of a civil suit merely because the accused has been acquitted in a related criminal proceeding arising from the same transaction. A judgment in a criminal proceeding, even if it results in acquittal, does not have binding effect on a parallel civil suit as the standards of proof, burden of proof, causes of action, and legal issues are fundamentally different between criminal and civil proceedings. The applicability of reverse burden provisions and statutory presumptions in criminal law must be strictly interpreted and applied with due regard to the presumption of innocence and constitutional rights of the accused, whereas in civil proceedings no such strict compliance is required. A creditor has the right to pursue both criminal and civil remedies concurrently, and the continuation of such proceedings is neither barred by law nor constitutes an abuse of process, provided the civil suit was not barred at the time of its filing.
On this section: Creates a statutory presumption that the cheque holder received it for discharge of debt or liability. The court clarified that this presumption does not extend to presuming the existence of a legally enforceable debt and must be read with the presumption of innocence in criminal law.
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Jik Industries Ltd. vs Amarlal V. Jumani
Court's Decision & Legal Precedent
Approval and sanction of a scheme of compromise and arrangement under Section 391 of the Companies Act, 1956 does not have the effect of automatically compounding an offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The offence, if committed prior to the scheme, does not stand automatically compounded by virtue of the scheme sanction. Compounding of criminal offences, including those under the NI Act, requires the explicit consent of the complainant or person aggrieved, and this consent cannot be assumed or implied from the sanction of a corporate restructuring scheme. The statutory procedure for compounding prescribed in Section 320 of the Criminal Procedure Code, 1973 applies to compounding of NI Act offences despite the non obstante clause in Section 147 of the NI Act, as Section 147 only makes offences compoundable but does not prescribe the mode and manner of such compounding.
On this section: Statutory presumption regarding cheques; Court noted that presumption cannot be overridden by scheme approval
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Milind Shripad Chandurkar vs Naimulla M. Khan
Court's Decision & Legal Precedent
A sole proprietor of a proprietary concern cannot maintain a complaint under Section 138 of the Negotiable Instruments Act, 1881, based solely on affidavit claiming proprietorship. The proprietor must establish his proprietorship through documentary evidence such as business registration documents, tax records, bank account statements, and similar official records to satisfy the statutory requirement of being the 'payee' or 'holder in due course' of the cheque. Mere affidavit statements, admissions by the accused, or oral testimony of witnesses are insufficient when documentary evidence can reasonably be expected to exist for a substantial business undertaking.
On this section: Presumption regarding dishonour of cheque for insufficiency of funds
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Dharam Nath vs Krishan Kumar
Court's Decision & Legal Precedent
When a cheque has been duly signed and issued by the accused, and the holder of the cheque has established the existence of a legally enforceable debt through credible evidence (including testimony regarding possession of pronote and receipt), the accused cannot escape liability by simple denial. The presumption under Section 139 of the Negotiable Instruments Act favors the holder of the cheque, and to rebut this presumption, the accused must present cogent facts and circumstances making it plausible that no debt existed. Technical objections regarding non-production of original documents are not sustainable when the accused had opportunity to demand their production during cross-examination but failed to do so. The burden shifts to the accused to prove absence of debt, not merely to deny it.
On this section: Establishes presumption in favor of the holder of cheque that it was issued for discharge of legally enforceable debt or liability; burden shifts to accused to rebut
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BIJU S/O PEREPPADAN DEVAASY vs JOBI S/O PAUL CHANDANATHIL HOUSE,MANGALASSERY DESOM
Court's Decision & Legal Precedent
Once the signature on a cheque is admitted, the statutory presumption under Section 139 of the NI Act must be drawn, and the accused must produce cogent evidence, not just mere suggestions, to rebut it.
On this section: Presumption in favour of holder.
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Rajabhau Janardhan Adhav vs Shaikh Mahebub @ Azhar Shaikh Hamid
Court's Decision & Legal Precedent
Once the signature on a cheque is admitted, the presumption under Section 139 of the NI Act applies; the accused must prove a probable defense through concrete evidence to rebut this presumption.
On this section: Presumption in favour of holder.
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Abilio Dsouza vs Adarsh Yeshwant Shet Mayekar
Court's Decision & Legal Precedent
A sole proprietor can file a criminal complaint under Section 138 of the Negotiable Instruments Act in his individual capacity for cheques issued in the name of his sole proprietorship concern, as a sole proprietorship does not constitute a separate juristic person and does not fall within the ambit of Section 141 of the NI Act. The complaint is maintainable when the sole proprietor is the sole beneficiary and manager of the proprietorship account, and the cheques are issued in discharge of a legally enforceable debt. All ingredients of Section 138 NI Act are satisfied when: (i) valid cheques are drawn on the account of the drawer; (ii) cheques are for payment of money; (iii) cheques are issued in discharge of debt or liability; (iv) cheques are returned unpaid; and (v) demand notice is served and payment is not made within 15 days. The presumption under Section 139 NI Act applies unless rebutted by the accused.
On this section: Applied to establish presumption that cheques were issued in discharge of debt or liability; presumption of existence of legal liability
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Nikhila Gupta vs Indu Verma
Court's Decision & Legal Precedent
When a cheque is issued by an authorized signatory of a company and is dishonoured, the signatory can be held criminally liable under Section 138 of the Negotiable Instruments Act, even if the cheque is from the company's account. The fact that another partner manages the account does not absolve the signatory of liability if their signature appears on the cheque and they are authorized to issue cheques on behalf of the company. The presumption under Section 139 applies, and the burden is on the accused to rebut it with credible evidence. Merely arguing that the cheque was from a company account managed by another person is not sufficient to rebut the presumption.
On this section: Presumption regarding cheque - when a cheque is presented for payment and dishonoured, it is presumed that the cheque was issued for a debt or liability unless the accused proves otherwise
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Balasubramaniyan vs Kalyanasundaram
Court's Decision & Legal Precedent
When a cheque is issued and subsequently dishonoured due to insufficient funds, and a legal notice is issued to the drawer, the statutory presumption under Section 139 of the Negotiable Instruments Act is invoked in favour of the complainant. The burden then shifts to the defence to rebut this presumption through credible oral or documentary evidence. If the defence fails to appear as a witness or fails to provide sufficient evidence to rebut the presumption, the conviction under Section 138 NI Act is sustainable and should be upheld on appeal.
On this section: The court applied Section 139 to establish the statutory presumption in favour of the complainant. The section presumes that the cheque was issued for a legally enforceable debt or obligation. The burden was on the defence to rebut this presumption, which the defence failed to do.
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KESHAV NATH vs STATE
Court's Decision & Legal Precedent
When an accused in a cheque dishonour case under Section 138 of the Negotiable Instruments Act takes a defence that the cheque was stolen or lost, the accused must establish this defence by cogent evidence and by demonstrating conduct consistent with that of a prudent person who would have immediately reported the theft/loss to police and his banker, sought return of the cheque, and taken appropriate legal action. Mere denial of liability or inconsistent statements regarding the defence are insufficient to rebut the mandatory statutory presumption under Section 139 of the NI Act that the cheque was issued in discharge of a legally enforceable debt or liability. The burden of proof to rebut this presumption lies on the accused and cannot be discharged by bare explanation or reasonable probability; it must be supported by proof that the court either believes to exist or considers so probable that a prudent man would act upon the supposition that it exists.
On this section: Presumption in favour of holder - It shall be presumed that the holder of a cheque received the cheque for discharge of debt or liability unless the contrary is proved; this is a mandatory presumption of law
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VISHALKUMAR MAHWSHBHAI PATEL vs HITESHKUMAR DHARMENDRABHAI KALYANI
Court's Decision & Legal Precedent
In a trial under Section 138 of the Negotiable Instruments Act, 1881, if the complainant proves the core foundational facts of execution, dishonour, and service of statutory demand notice, the statutory presumption of debt under Section 139 remains mandatory and binding unless the accused adduces sufficient rebuttal evidence on a standard of preponderance of probabilities.
On this section: Mandatory presumption in favor of the holder of the cheque.
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Dr. Rajesh Verma vs Sri Trinath Gorh
Court's Decision & Legal Precedent
In cheque dishonour cases under Section 138 of the Negotiable Instruments Act, once the complainant establishes prima facie that a cheque was issued and dishonoured, statutory presumptions under Sections 118 and 139 arise in favour of the holder. The burden then shifts to the accused to rebut these presumptions by leading cogent and credible evidence demonstrating that no legally enforceable debt existed or that the cheque was not issued in discharge of such debt. Mere denial or plausible explanation by the accused is insufficient; the accused must necessarily disprove the prosecution case through substantive evidence. Failure to put suggestions to the complainant during cross-examination or to adduce defence evidence results in acceptance of the complainant's version and conviction of the accused.
On this section: Presumption in favour of holder. The court held that it shall be presumed unless the contrary is proved that the holder of a cheque received the cheque for the discharge of any debt or other liability, creating a statutory presumption favoring the complainant.
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Mahesh Gautam vs Rajeev Kohli
Court's Decision & Legal Precedent
The mismatch of signatures on a cheque does not escape the penal consequences under Section 138 of the Negotiable Instruments Act, particularly when the cheque is returned due to insufficient funds.
On this section: Establishes a rebuttable presumption that the cheque was issued for discharge of debt or liability.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Hence, prayed to acquit the accused. :: Legal Position :: When presumption u/s. 139 of the Negotiable Instruments Act is raised and its effect : 09. In trial under section 138 of the Negotiable Instruments Act, the complainant is having support of presumption under section 139 of the Negotiable Instruments Act for supporting there exists debt or liability for issuing cheque in question in favour of the complainant. The question would be, when the presumption under section 139 would raise in favour of the complainant. This question is answered by the Hon'ble Apex Court in T. Vasanta Kumar …
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… If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. Reliance is placed on Uttam Ram Vs. Devinder Singh Hudan & ANR [Criminal Appeal No. …
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… It was held that: Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be establish by the …
Questions about Section 139
What have the courts held on Section 139 of the Negotiable Instruments Act?
Rangappa vs Sri Mohan (07 May 2010) is the leading judgment on this section among those set out below: Presumption in favour of holder - central provision creating rebuttable presumption that cheque holder received cheque for discharge of debt or liability; held that this presumption extends to the existence of a legally enforceable debt; reversed onus clause requiring accused to rebut on preponderance of probabilities. Another 15 judgments on this section are set out below, 6 of them from the Supreme Court. They run from 2009 to 2025.
How do I find court cases under Section 139 of the Negotiable Instruments Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: NI Act 139, section 139 NI Act, section 139 of the Negotiable Instruments Act. People searching for it also type negotiable instruments act 139 presumption and ni act 118 and 139. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 16 reported judgments on this section are set out on this page, beginning with Rangappa vs Sri Mohan (07 May 2010).
What should I read with Section 139 of the Negotiable Instruments Act, and has it changed?
Its own text turns on section 138 (Dishonour of cheque for insufficiency, etc., of funds in the account), so none of them can safely be read on its own.
When did Section 139 of the Negotiable Instruments Act come into force?
Section 139 of the Negotiable Instruments Act, cited as NI Act 139, came into force on 01 Mar 1882, having been enacted on 09 Dec 1881. It is in force as at the date shown on this page.
Other sections of this Act
- 138. Dishonour of cheque for insufficiency, etc., of funds in the account312 words
- 142A. Validation for transfer of pending cases299 words
- 143. Power of Court to try cases summarily297 words
- 143A. Power to direct interim compensation291 words
- 142. Cognizance of offences290 words
- 141. Offences by companies287 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.