Presumption Under the Negotiable Instruments Act: A Double-Edged Device in Judicial Application

Presumption Under the Negotiable Instruments Act: 

A Double-Edged Device in Judicial Application

I. Introduction

Section 138 of the Negotiable Instruments Act, 1881, is one of the most litigated provisions in Indian criminal jurisprudence. Over time, the Supreme Court of India has evolved a nuanced understanding of its evidentiary presumption under Section 139. While the provision introduces a reverse burden mechanism, recent judgments reveal that this presumption functions neither as a rigid formula nor an automatic route to conviction. Instead, it behaves as a forensic instrument whose strength varies depending on the factual context. Two landmark judgments — Rajesh Jain v. Ajay Singh (2023 LiveLaw SC 866) and Sri Dattatraya v. State of Maharashtra (2024 INSC 586) — illustrate this dual operation.

This article studies how the same statutory presumption was applied differently, leading to conviction in one case and acquittal in the other. The exercise demonstrates that the presumption is best understood as a double-edged tool capable of cutting both ways depending on evidentiary coherence.

II. Case Narratives

In Rajesh Jain, the accused acknowledged multiple core elements: the existence of a loan transaction, the issuance of the cheque, and his signature. The complainant’s documentary evidence and witness testimony exhibited internal consistency. Although the accused suggested misuse of a blank cheque, he admitted taking money and never lodged any complaint alleging forgery or coercion. His explanations were contradictory and implausible. Consequently, the Supreme Court held that the statutory presumption was activated and remained intact. Since the accused failed to rebut it, conviction followed with imposition of double the cheque amount.

In Sri Dattatraya, the accused admitted only his signature, not the execution of the cheque or underlying liability. The complainant was unable to produce satisfactory evidence demonstrating financial capacity to lend the alleged amount. The narrative lacked dates, purpose, and credible formation of the transaction. The Court found that although Section 139 presumption arose, the accused successfully generated doubt through cross-examination, exposing inconsistencies and gaps in the complainant’s version. The presumption weakened and collapsed, sustaining acquittal.

III. The Presumption as an Evidentiary Instrument

The Supreme Court in Rajesh Jain clarified the conceptual foundation of presumptions. Section 139 embodies a rebuttable presumption of law requiring the Court to presume that a cheque was issued in discharge of liability until the opposite party proves otherwise. Importantly, the presumption affects only the evidential burden, not the legal burden of the complainant, and that burden shifts to the accused once execution of the cheque is admitted.

However, presumption is not a conclusive declaration of guilt. Its intensity depends on whether the admission covers (i) signature alone or (ii) execution and underlying liability. Where execution is admitted, rebuttal must be compelling; where only signature is admitted, rebuttal can succeed through circumstantial doubt, financial improbability, or weakness in the complainant’s case.

Thus, the presumption operates like a forensic pressure point: it narrows judicial inquiry but does not predetermine outcome.

IV. Comparative Jurisprudential Perspective

The departure in the two rulings rests not on divergent legal principles but on divergent factual matrices. In Rajesh Jain, the complainant’s case stood on consistent facts, corroborated admissions, and judicially accepted probability. The presumption transformed into a prosecutorial sword. In Sri Dattatraya, evidentiary gaps weakened the complainant’s foundation; the presumption remained fragile and dissolved once the accused implanted reasonable doubt. Here, the presumption served as a protective shield.

The strength of Section 139 is therefore contextual and collapsible. It is not a mechanical conviction-trigger; it is a presumption capable of being dislodged by doubt, inconsistency, or lack of foundational financial credibility.

V. Comparative Table of Operational Outcomes

Aspect	Rajesh Jain (2023)	Sri Dattatraya (2024)
Admission by accused	Liability and execution admitted	Signature alone admitted
Narrative credibility	Consistent and corroborated	Incomplete and uncorroborated
Complainant’s financial capacity	Not challenged	Doubtful and unproven
Defence strength	Contradictory and implausible	Probable enough to generate doubt
Judicial consequence	Conviction	Acquittal sustained
Role of presumption	Sword compelling guilt	Shield preserving doubt

VI. Conclusion

Section 139 NI Act does not operate in doctrinal isolation. Its vitality depends upon the evidentiary soil in which it is planted. Where foundational facts are admitted and coherent, it sharpens into a prosecutorial instrument; where foundational facts are shaky, it blunts into a defence-protecting mechanism. Statutory presumptions are therefore judicially elastic rather than rigid. Their survival depends on (i) the nature of admissions, (ii) consistency in the complainant’s narrative, (iii) financial plausibility, and (iv) whether the defence narrative produces probabilistic doubt.

The jurisprudential lesson is clear: presumption under Section 139 is a double-edged device that may cut in opposite directions. Its power arises not from the statute alone but from judicial assessment of fact, credibility, and probability. In cheque dishonour litigation, therefore, the decisive battlefield remains factual persuasiveness, not merely invocation of statutory language.