Section 137 NI Act: Presumption as to foreign law

Negotiable Instruments Act, 1881

Section 137 NI Act at a Glance

Section 137 NI Act creates a legal presumption that the law of any foreign country regarding promissory notes, bills of exchange and cheques is the same as the law of India, unless and until the contrary is proved.

Section 137 NI Act Bare Act Text

137. Presumption as to foreign law.

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 and until the contrary is proved.

Amendments to this section
  • The words "or the State of Jammu and Kashmir" omitted by Act 62 of 1956, s. 2 and the Schedule.
  • Subs. by the A.O. 1948, A.O. 1950 and the Act 3 of 1951, s. 3 and the Schedule for "British India".

Section 137 NI Act in Simple Words

Section 137 NI Act sets a statutory presumption about foreign law in disputes involving promissory notes, bills of exchange and cheques. Under Section 137 NI Act, the law of any foreign country regarding promissory notes, bills of exchange and cheques is presumed to be the same as the law of India.

The presumption holds unless and until the contrary is proved. The words "or the State of Jammu and Kashmir", marked by asterisks in the bare text, were omitted by Act 62 of 1956. The Adaptation Orders of 1948 and 1950 and Act 3 of 1951 put "India" in place of "British India".

When Section 137 NI Act Applies

  • The question concerns the law of a foreign country regarding promissory notes, bills of exchange or cheques.
  • The foreign law is presumed to be the same as the law of India.
  • The presumption holds unless and until the contrary is proved.

Example of Section 137 NI Act

Hema brings a suit in a Hubballi court on a dishonoured cheque for ₹80,000 that was drawn in a foreign country. In the suit, Arif argues that the foreign country's law on cheques differs from the law of India, but Arif produces no proof of what that foreign law is. Under Section 137 NI Act, the law of that foreign country regarding cheques is presumed to be the same as the law of India unless and until the contrary is proved. Because the contrary has not been proved, the Hubballi court applies the presumption that the foreign law on the cheque is the same as the law of India.

FAQs on Section 137 NI Act

What is Section 137 NI Act?▼

Section 137 NI Act is a presumption provision. It states that the law of any foreign country regarding promissory notes, bills of exchange and cheques is presumed to be the same as the law of India, unless and until the contrary is proved.

Is the presumption under Section 137 NI Act conclusive?▼

No. Under Section 137 NI Act, the presumption that foreign law regarding promissory notes, bills of exchange and cheques is the same as the law of India holds only unless and until the contrary is proved.

Which instruments are covered by the presumption in Section 137 NI Act?▼

Promissory notes, bills of exchange and cheques are covered. Section 137 NI Act applies specifically to the law of any foreign country regarding those three instruments.

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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·