Section 139 NI Act: Presumption in favour of holder

Negotiable Instruments Act, 1881

Section 139 NI Act at a Glance

Section 139 NI Act creates a legal presumption in favour of the holder of a cheque. Unless the contrary is proved, the court presumes that the holder received a cheque under Section 138 NI Act to discharge a debt or other liability.

Section 139 NI Act Bare Act Text

139. 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.

Section 139 NI Act in Simple Words

Section 139 NI Act creates a presumption in favour of the holder of a cheque. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 NI Act for the discharge, in whole or in part, of any debt or other liability.

When Section 139 NI Act Applies

The instrument is a cheque of the nature referred to in Section 138 NI Act.
The person relying on the presumption under Section 139 NI Act is the holder of that cheque.
The court presumes that the holder received the cheque for the whole or partial discharge of any debt or other liability, unless the contrary is proved.

Example of Section 139 NI Act

Varun in Gwalior issues a cheque for ₹50,000 from a bank account maintained by Varun to Sarita, and the bank returns the cheque unpaid due to insufficient funds. After Varun fails to pay within 15 days of receiving a written demand notice from Sarita, a prosecution under Section 138 NI Act begins. Under Section 139 NI Act, the court presumes that Sarita, as the holder of the cheque, received the ₹50,000 cheque from Varun for the whole or partial discharge of a debt or other liability. This presumption in favour of Sarita holds unless the contrary is proved.

FAQs on Section 139 NI Act

What is Section 139 NI Act?▼

Section 139 NI Act is a rule of evidence in cheque dishonour cases that creates a legal presumption in favour of the holder of a cheque. It states that, unless the contrary is proved, the court must presume that the holder received the cheque of the nature referred to in Section 138 NI Act for the whole or partial discharge of a debt or other liability.

Can the presumption under Section 139 NI Act be disproved?▼

Yes. Section 139 NI Act states that the presumption applies unless the contrary is proved.

Who gets the benefit of the presumption under Section 139 NI Act?▼

The holder of the cheque. Under Section 139 NI Act, the presumption operates in favour of the holder who received a cheque of the nature referred to in Section 138 NI Act.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

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