Judgment reinforces presumptions under Negotiable Instruments Act, validates 9% interest award
In a noteworthy decision, the Delhi High Court, presided over by Justice Ms. Neena Bansal Krishna, upheld a trial court's judgment decreeing a civil suit for the recovery of Rs. 6,00,000 against Rakesh Srivastava. This case, Rakesh Srivastava v. Pradeep Yadav, underscores significant provisions of the Negotiable Instruments Act, 1881, particularly regarding cheque issuance and presumptions of debt.
The judgment, dated August 10, 2026, dismissed Mr. Srivastava's appeal challenging the trial court’s decision, which was originally delivered on April 30, 2026. The appellant had contested the trial court's findings and its award of pendente lite and future interest at 9% per annum, arguing there was no contractual rate of interest agreed upon. However, the High Court found the interest rate reasonable and not arbitrary, affirming the trial court's exercise of discretion under Section 34 of the Civil Procedure Code, 1908.
At the core of this legal battle was a cheque issued by Mr. Srivastava to Mr. Yadav, which was returned unpaid. The trial court had found that Mr. Srivastava indeed issued the cheque in discharge of a legally enforceable debt, and the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operated in favor of the cheque holder, Mr. Yadav.
Mr. Srivastava's defense, claiming the cheque was misplaced and not intended for Mr. Yadav, was dismissed due to lack of evidence. The court emphasized that the burden of rebutting the presumption of consideration lies on the drawer of the cheque. The court noted Mr. Srivastava’s failure to prove the cheque’s alleged misplacement or to provide any substantial evidence supporting his claim.
The High Court also addressed Mr. Srivastava’s objections regarding service of legal notice, concluding that the presumption of service was sufficiently supported by postal evidence. Furthermore, the court rejected territorial jurisdiction objections, as these were not raised during the trial.
This case reaffirms that under the Negotiable Instruments Act, a cheque once executed is presumed to be issued for consideration unless convincingly rebutted by the issuer. The judgment reinforces the legal principle that mere assertions without cogent evidence cannot overturn statutory presumptions, thereby strengthening the position of cheque holders in recovery suits.
Bottom Line :
Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881, operates in favor of the holder of the cheque once its execution is established, unless rebutted by cogent evidence.
Statutory provision(s): Sections 118(a) and 139 of the Negotiable Instruments Act, 1881; Section 34 of the Civil Procedure Code, 1908; Section 27 of the General Clauses Act, 1897.
Rakesh Srivastava v. Sh. Pradeep Yadav, (Delhi) : Law Finder Doc id # 2967872
