D. Chandran v. S. Anilkumar

Negotiable Instruments Act 1881, Section 118, 138 and 139 – Rebuttal of Presumptions - Financial Capacity - Execution - Discharge of Liability.

Once the signature on a cheque is admitted, the court is obligated to presume the cheque was issued for a legally enforceable debt. The standard of proof required to rebut the statutory presumptions is "preponderance of probabilities" rather than "mere possibility" or "bare denial". The initial burden of raising the defense of lack of financial capacity rests on the accused; failure to respond to a statutory notice under Section 138 gives rise to an inference that the complainant’s version carries merit. The fact that the signature and the body of a cheque are written in different inks does not invalidate the instrument or create doubt regarding its execution. A party asserting the discharge of a liability must prove the same with cogent and convincing evidence. [Para 10, 18 - 20]