Section 139 of the N.I. Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability.This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.But the accused failed to discharge his burden having admitted the cheques and pronote were signed by him.
Once the accused raised doubts about the financial capacity of the complainant for giving a hand loan of huge amount to the accused – a probable defence on behalf of the accused – rebutted the presumption under sec.139 – which shifted the burden on the complainant to prove his financial capacity and other facts – the complainant failed to prove his financial capacity and as such complaint is liable to be dismissed.
whether in the absence of any rebuttal by the respondents to the fact that the promissory note was for consideration as required, which gave rise to the presumption under Section 118 of the Negotiable Instruments Act, the courts below were justified in holding that since the appellant had given evidence inconsistent with such presumption, no decree could be passed on the basis of such presumption .
Article 136 which provided for 12 years period of limitation for the execution of a decree = When there was a legislative bar for the execution of a decree and later due to legislative intervention the decree had to be scaled down and amended then enforceability of decree shall commence when the bar ceases or from the date the decree is amended and scaled down. If the period of 12 years is counted from the date of the amendment of the decree then the execution petition filed by the decree-holder on 18.9.1989 is within the period of limitation.