Sections 139 and 140 of the Negotiable Instruments Act, 1881
Sections 139 and 140 operate with Section 138 in cheque dishonour prosecutions. Section 139 creates a rebuttable presumption in favour of the holder, while Section 140 prevents the drawer from relying on the specified plea that there was no reason to believe the cheque would be dishonoured.
Section 139: unless the contrary is proved, the court presumes that the holder received the cheque referred to in Section 138 for discharge, wholly or partly, of a debt or other liability.
Section 140: in a Section 138 prosecution, it is not a defence that the drawer had no reason to believe, when issuing the cheque, that it might be dishonoured on presentment for the reasons stated in Section 138.
Section 139 - Presumption in favour of holder
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.
Meaning of the Section 139 presumption
Section 139 is a statutory rule of presumption. Once the factual foundation necessary for the presumption is established, the provision requires the court to presume the purpose stated in the section unless the contrary is proved. The Supreme Court has explained that the presumption includes the existence of a legally enforceable debt or liability, while remaining rebuttable.
The Supreme Court has repeatedly stated that the standard for rebutting the Section 139 presumption is the civil standard of preponderance of probabilities. A probable defence may arise from evidence led by the accused, material produced by the complainant, or circumstances appearing from the record.
Section 140 - Defence which may not be allowed in prosecution under Section 138
It shall not be a defence in a prosecution for an offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section.
Section 140 excludes a particular defence based on the drawer's lack of expectation or belief that the cheque would be dishonoured. The provision does not, by its wording, eliminate every defence available in a Section 138 prosecution. Other legally available defences, including rebuttal of the Section 139 presumption, remain governed by the Act and applicable judicial principles.
Relationship between Sections 138, 139 and 140
Section 138 defines the cheque dishonour offence and its statutory conditions. Section 139 assists the holder through a rebuttable presumption concerning the purpose for which the cheque was received. Section 140 separately prevents the drawer from avoiding liability merely by asserting that there was no reason to expect dishonour when the cheque was issued.
The explanation to Section 138 defines "debt or other liability" as a legally enforceable debt or other liability. The Supreme Court's interpretation of Section 139 therefore has particular significance when the existence or enforceability of the alleged liability is disputed.
Supreme Court principles on Section 139
Rangappa v. Sri Mohan
The Supreme Court held that the Section 139 presumption includes a presumption as to the existence of a legally enforceable debt or liability. It is nevertheless rebuttable, and the accused may contest that liability by raising a probable defence.
Basalingappa v. Mudibasappa
The Court summarised that, once execution of the cheque is admitted, Section 139 mandates the statutory presumption; the presumption is rebuttable; and the standard for rebuttal is preponderance of probabilities. The accused may rely on his own evidence as well as material brought by the complainant and surrounding circumstances.
Later Supreme Court application
The Court has continued to apply these principles, emphasising that once evidence sufficient on a preponderance of probabilities shows that the pleaded debt or liability did not exist in the asserted manner, the evidential burden shifts back to the complainant to establish the liability on the facts.
Official statutory and judicial sources
The central statutory text is available through India Code. Supreme Court judgments and orders can be searched through the Supreme Court Reports portal and the Court's official judgment services.