Presumption of consideration under negotiable instruments law can be rebutted by probable defence and insufficient proof of loan payment.

Section 118(a) of the Negotiable Instruments Act creates a presumption that a promissory note and cheque were executed for consideration, but that presumption can be rebutted on a preponderance of probabilities. Here, the defendant admitted the signatures yet relied on surrounding circumstances, witness inconsistencies, and the lack of convincing proof that the alleged loan was actually advanced. The court noted that the plaintiff's bank statements did not establish withdrawal or passing of consideration on the relevant date. The defendant therefore raised a probable defence and displaced the initial presumption, after which the burden shifted back to the plaintiff, who failed to prove consideration.

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Issues: Whether the promissory note and cheque were supported by consideration and whether the defendant had rebutted the statutory presumption arising from their execution.

Analysis: The dispute turned on the presumption under Section 118(a) of the Negotiable Instruments Act, 1881 that negotiable instruments are drawn for consideration unless the contrary is proved. The defendant admitted the signatures but placed surrounding circumstances to show improbability of the alleged loan, including the closure and sale of the mill, the plaintiff's admission that he was only an electrical contractor, inconsistencies in the testimony of the supporting witness, and the absence of convincing proof that the plaintiff actually advanced the amount. The bank statements relied on by the plaintiff were found insufficient to prove withdrawal or passing of consideration on the relevant date. On a total evaluation of the evidence, the defendant raised a probable defence and discharged the initial presumption on a preponderance of probabilities, after which the burden shifted back to the plaintiff, who failed to prove consideration.

Conclusion: The defendant successfully rebutted the presumption attached to the promissory note and cheque, and the plaintiff failed to establish passing of consideration.

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