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Once execution of a cheque of the kind referred to in section 138 of the Negotiable Instruments Act,…

Section 139 presumes that the holder received the cheque to discharge a debt or liability, wholly or in part, unless the contrary is proved.

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Once execution of a cheque of the kind referred to in section 138 of the Negotiable Instruments Act, 1881 is established, what does section 139 presume unless the contrary is proved?

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Answer and explanation

Correct answer B

Section 139 presumes that the holder received the cheque to discharge a debt or liability, wholly or in part, unless the contrary is proved.

Option feedback

Option A

Section 139 presumes discharge of a liability, so a gift would have to be shown in rebuttal where relevant.

Option B

Section 139 expressly creates this rebuttable presumption in favour of the holder.

Option C

The distinct presumption as to the date appearing on a negotiable instrument is in section 118(b).

Option D

Section 139 does not presume receipt of the statutory demand notice. Its subject is why the holder received the cheque.

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