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Central Act · India · Chapter XIII — Special Rules of Evidence

Section 118 Presumptions as to negotiable instruments

Negotiable Instruments Act, 1881 · Edition: India Code central text incorporating the 2018 amendment

Until the contrary is proved, the following presumptions shall be made:—

(a) of consideration:—that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date:—that every negotiable instrument bearing a date was made or drawn on such date;

(c) as to time of acceptance:—that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer:—that every transfer of a negotiable instrument was made before its naturity;

(e) as to order of indorsements:—that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;

(f) as to stamp:— that a lost promissory note, bill of exchange or cheque was duly stamped;

(g) that holder is a holder in due course:—that the holder of a negotiable instrument is a holder in due course: provided that, where the instrutment has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

Source document ↗

Judgments on Section 118

LOK 2026 (10) Ker. 77 · High Court of Kerala

Vasanthy v. State of Kerala

Equivalent citations: 2026 KER 79569

When the complainant deposes on oath detailing the transaction and execution of the cheque, and such testimony remains unshaken in cross-examination, the initial burden under Sections 118 and 139 of the NI Act stands discharged. Omission to mention the date of borrowing in the complaint…

LOK 2026 (8) Ker. 76 · High Court of Kerala

D. Chandran v. S. Anilkumar

Equivalent citations: 2026 (8) KLR 73 : 2026 KER 60969 : 2026 KLT OnLine 2102

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…

LOK 2026 (7) Ker. 291 · High Court of Kerala

Prameela Varghese v. Abraham Samuel

Equivalent citations: 2026 KER 57049

In the present case, while the plaintiff proved the defendant's signature, material contradictions in the testimony of the plaintiff's witnesses failed to establish voluntary execution or delivery of the cheque by the defendant. The statutory presumptions under the NI Act were therefore un-activatable. Decree of…