What is Section 118 of the Negotiable Instrument Act case law?
Asked by: Sofia Nolan | Last update: May 4, 2026Score: 4.8/5 (25 votes)
Section 118 of India's Negotiable Instruments Act (NIA) creates key legal presumptions for instruments like promissory notes and checks, shifting the burden of proof: courts presume they are for consideration, duly stamped, executed, and transferred before maturity, requiring the challenger to prove otherwise, as established in cases like Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu and Bharat Barrel & Drum Manufacturing Co. v. Amin Chand Payrelal, highlighting the need for strong defense to rebut these default legal assumptions.
What is Section 118 of the negotiable instrument Act cases?
118(a) of the Act, there is a presumption that every negotiable instrument was made or drawn for consideration. Even though the presumption available under S. 118(a) is a rebuttable presumption, the respondent has not cared to rebut that presumption and to adduce any evidence in support of the case pleaded by him.
What is presumption under 118?
The presumption under Section 118 of the NIA is a rebuttable presumption of law, i.e., a mandatory presumption that can be proved contrary. There are two meanings of the burden of proof, one is the matter of law and pleading and the other is the burden of establishing the case.
What is the presumption on proof of protest?
In a suit upon an instrument which has been dishonoured, the Court shall, on proof of the protest, presume the fact of is dishonour, unless and until such fact is disproved.
What is the Negotiable Instruments Act 118 and 139?
Under Section 118(a), the person who is challenging the presumption should prove that the instrument was not issued or transferred for consideration. Under Section 139, the person who is challenging the presumption must prove that the cheque was not issued to discharge the debt or other liabilities.
Presumptions in Negotiable Instruments Act /Cheque Bounce /Section 118&139 NI Act(Surendra Advocate)
What is the purpose of section 118?
All contracts of sale or sales by trust deed, for the purpose of housing for persons and families of low or moderate income shall bear interest.
What is the Supreme Court's landmark judgement on 138-NI Act?
In its conclusive findings, the Supreme Court held23 that a complaint under Section 138 of the NI Act remains valid and maintainable even if only the partners of a firm are named as accused, without the firm itself being formally arraigned.
What is proof of protest in negotiable instrument?
When a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may, within a reasonable time, cause such dishonour to be noted and certified by a notary public. Such certificate is called a protest.
What is conclusive proof of evidence?
"Conclusive proof".
-- When one fact is declared by this Act to be conclusive proof of another, the Court shall, on proof of the one fact, regard the other as proved, and shall not allow evidence to be given for the purpose of disproving it.
What are the legal presumptions of a negotiable instrument?
It is presumed that, consideration is present in every negotiable instrument until the contrary is presumed. The presumption of consideration, Page 6 6 however may be rebutted by proof that the instrument had been obtained from, its lawful owner by means of fraud or undue influence.
What is the violation of Section 118?
Whoever intending to facilitate or knowing it to be likely that he will thereby facilitate the commission of an offence punishable with death or imprisonment for life; voluntarily conceals by any act or omission or by the use of encryption or any other information hiding tool, the existence of a design to commit such ...
What is the standard of proof in the NI Act?
It is well settled that the standard of proof which is required from the accused to rebut the statutory presumption under Sections 118 and 139 of the N.I Act is preponderance of probabilities and that the Page 5 Crl. Appeal No. 444/2009 5 2025:KER:62745 accused is not required to prove his case beyond reasonable doubt.
Is section 118 bailable or not?
Offence : Voluntarily causing grievous hurt by dangerous weapons or means [except as provided in section 122(2)]. Punishment : Imprisonment for life or imprisonment of not less than 1 year but which may extend to 10 years and fine. Cognizable or Non-cognizable : Cognizable. Bailable or Non-bailable : Non-bailable.
What are the presumptions of Section 118?
118. Presumptions as to negotiable instruments. (a) of consideration; (b) as to date; (c) as to time of acceptance; (d) as to time of transfer; (e) as to order of indorsements; (f) as to stamp; (g) that holder is a holder in due course; 119.
What legal cases involve section 118?
An oath is described as an affirmation or other method that is authorized by law to affirm the truth of a statement. PC 118 perjury laws apply to testimony in a courtroom or during a civil deposition, statements made in a sworn affidavit and declaration, and facts that are submitted in a driver's license application.
Is section 118 still in effect?
The TCJA effectively repealed section 118 as applied to non-shareholder contributions to capital. As a consequence, nearly all cash grants received either from a governmental entity or from a civic organization will now be included in taxable income.
Can conclusive evidence be challenged?
Clarification: Conclusive evidence is distinct because it cannot be disputed and leads to a definitive conclusion.
How much evidence is conclusive?
To establish Conclusive Proof for your position.
Conclusive proof is using evidence that is strong and convincing enough to override any objections to it. This evidence is so strong that the law will not permit it to be contradicted.
What are some examples of conclusive proof?
Illustrations of Conclusive Proof under the BSA
- Digital Records. Example: A digitally signed contract or an electronic agreement authenticated using blockchain technology may be treated as conclusive proof of the terms agreed upon by the parties. ...
- Government-Issued Certificates. ...
- Bank Records. ...
- Court Judgments.
Can a notary note a protest of a negotiable instrument?
Definition & meaning
This declaration serves to protect the rights of the person issuing it. For instance, a notary public may issue a notice of protest to inform a drawer or indorser of a negotiable instrument that it has not been paid or accepted.
What are the requirements for a cheque bounce notice?
Act contains four important aspects. It says that the notice (1) must be given by the payee or the holder in due course; (2) must be in writing; (3) must be given within thirty days of receipt of information of dishonour and (4) must make a demand for payment of the amount of the cheque dishonoured.
What are the requirements for a document to qualify as a negotiable instrument?
When dealing with negotiable instruments, below are eight requirements to keep in mind:
- Must be in writing. ...
- Must be signed by the maker or drawer. ...
- Must be a definite order or promise to pay. ...
- Must be unconditional. ...
- Must be an order or promise to pay a sum certain. ...
- Must be payable in money.
What is the new rule of cheque bounce case 2025?
Legal notices must be sent within 30 days of dishonour, stating the cheque number, date, branch, and amount. Electronic delivery (email, SMS) is now valid, with physical service required only if digital notice fails.
How to win 138 case?
The accused may raise the following defenses in a cheque dishonor case:
- No Legal Liability – The cheque was not issued for a legally enforceable debt.
- Cheque Was Issued as a Security Deposit – If the cheque was issued as a security and not for payment, it may not attract liability under Section 138.
What is Section 118 and 139 of the NI Act?
This Court is of the view that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally ...