Section 139 of NIA : Section 139: Presumption In Favour Of Holder

Explanation using Example

Imagine a scenario where John issues a cheque to Mike as payment for a laptop Mike sold to him. Later, the cheque bounces due to insufficient funds in John's account. Under Section 139 of the Negotiable Instruments Act, the court will presume that Mike, the holder of the cheque, received this cheque from John as a payment (either full or partial) for the laptop. It is then up to John to prove otherwise if he wants to contest this presumption and show that the cheque was not meant for the discharge of any debt or other liability.