Sections 118 and 139 of the Negotiable Instruments Act (NI Act) create mandatory, rebuttable presumptions in favor of the complainant to speed up cheque-bounce cases.
The core difference is that Section 118 presumes the existence of consideration (value/money changed hands), while Section 139 presumes the existence of a legally enforceable debt (the cheque was issued to pay off a specific liability).
Key Differences at a Glance
| Feature | Section 118 (NI Act) | Section 139 (NI Act) |
| Focus | Consideration | Debt or Liability |
| Legal Presumption | Assumes the cheque was drawn or made for a valid value/consideration. | Assumes the holder received the cheque in whole or partial discharge of a debt or liability. |
| Why it Matters | The accused cannot simply claim the cheque was drawn for no reason without proving it. | The accused cannot simply claim they owed the complainant nothing without proving it. |
| Nature of Burden | Reverse Onus: The burden shifts from the complainant to the accused to disprove the presumption. | Reverse Onus: The burden shifts to the accused to prove the non-existence of a debt. |
Both Sections Work Together
Courts read both sections together. Once the signature and issuance of the cheque are admitted, the court automatically presumes that the cheque is backed by value (Section 118) and was issued to settle a valid, existing debt (Section 139).
Both are legal presumptions, not conclusive proof. The accused can rebut them, not by proving their defense beyond a reasonable doubt, but by presenting a probable defense based on a preponderance of probability.
