Rebuttable presumption of consideration under promissory notes remains with plaintiff unless defendant shows a probable defence.

Section 118(a) of the Negotiable Instruments Act creates a rebuttable presumption of consideration once execution of a promissory note is admitted or proved. The defendant can rebut it on a preponderance of probabilities by direct or circumstantial evidence, including material supporting an adverse inference under Section 114 of the Indian Evidence Act, 1872. If the defendant fails to raise a probable defence, the statutory presumption remains with the plaintiff; after both sides lead evidence, the court must consider the entire record and the abstract burden of proof becomes less significant. On the stated facts, the defendant did not rebut the presumption and the plaintiff succeeded on the promissory note. A dissenting view held that the burden shifts only after the absence of consideration is established.

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Issues: Whether, on proof of execution of a promissory note, the presumption of consideration under Section 118(a) of the Negotiable Instruments Act continues to operate when the defendant rebuts it by showing a probable defence, and whether the plaintiff can succeed on the strength of that presumption after both sides have led evidence.

Analysis: The presumption under Section 118(a) is a presumption of law and arises once execution of the promissory note is admitted or proved. It is rebuttable, and the defendant is not required to disprove every conceivable form of consideration by direct evidence alone. The presumption may be displaced by proof, direct or circumstantial, or by relying on other presumptions of law or fact, including the adverse inference under Section 114 of the Indian Evidence Act, 1872. The standard for rebuttal is preponderance of probabilities: the defendant must bring on record facts and circumstances making non-existence of consideration probable or showing that the plaintiff's version is not true. If that initial burden is not discharged, the plaintiff retains the benefit of the statutory presumption. Once both parties have adduced evidence, the court must assess the entire evidence and the abstract burden of proof becomes of little significance.

Conclusion: The defendant had not discharged the initial burden to rebut the statutory presumption, and the plaintiff was entitled to succeed on the promissory note.

Dissenting Opinion: Ruma Pal, J. held that the evidential burden does not shift to the plaintiff until the defendant establishes the absence of consideration, and that the presumption should not be treated as displaced merely because the plaintiff's case is not accepted.

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