Dishonour of Cheque – Statutory Presumption

A dishonor of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability. There is the mandate of presumption of consideration in terms of the provisions of the Negotiable Instruments Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Negotiable Instruments Act. Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287.

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