The Himachal Pradesh High Court held that an admitted signature on a cheque, even if blank, triggers the statutory presumption under Section 139 of the Negotiable Instruments Act, placing the burden on the accused to rebut it.
HP HC on Presumption Under NI Act: Signature Admission is Key
The Himachal Pradesh High Court has upheld the conviction of an accused in a cheque dishonour case, ruling that admission of signature on a blank cheque activates the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881. The burden then shifts to the accused to prove absence of liability.
The case involved a blank cheque with an admitted signature, returned with the comment 'payment stopped'. Despite claiming the cheque was issued as security and not for debt discharge, the accused failed to rebut the statutory presumption. The Court held that
once the signature is admitted, the law presumes the existence of a legally enforceable debt or liability,and mere denial is insufficient.
Section 139 creates a rebuttable presumption that the holder of a cheque received it for discharge of a liability. The ruling reinforces that evidentiary burden shifts to the accused to prove otherwise by credible evidence. For practitioners, this underscores the risk in issuing signed blank cheques—even for security—and the critical need to document underlying arrangements to counter presumption under Section 139.
Citations
- Negotiable Instruments Act, 1881, Section 139
