Presumptions About Negotiable Instruments

Sections 118 and 119 of Negotiable Instruments Act lay down certain general presumptions in respect of negotiable instruments. These presumptions are said to prevail unless the contrary is proved. The presumptions are as follows:

1) Consideration: Every instrument was made, drawn, accepted, indorsed or transferred for consideration.

2) Date:
Every instrument bearing a date was made or drawn on such a date only.

3) Time of acceptance: Every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity.

4) Time of transfer: Every transfer of a negotiable instrument was made before its maturity.

5) Order of indorsement: The indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon.

6) Duly Stamped: A lost instrument was duly stamped.

7) Holder: The holder of a negotiable instrument is also a holder-in-due-course, so long as it is not proved that the holder has obtained the instrument from its lawful owner by committing an offence (fraud) or for unlawful consideration.

8) Protest: In a suit upon an instrument which has been dishonoured, the court shall presume the fact of dishonour on proof of the protest.

There can be no other presumptions beyond what have been specifically listed in the Act. For example, when the date is found on the note, the presumption is that it was drawn only on that date and not that it was inserted later. One has to prove if he wants to dispute the date of entering the date. All the above presumptions can be rebutted by the defendant.

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