06/05/2026
Cheque Dishonour Under Section 138: Why the Real Battle Is Section 118
In a cheque dishonour prosecution, the statute presumes consideration. The defence has a job to do — and bare denial is not it.
If you are the accused in a cheque dishonour case and you have been advised that you need not do anything to prove your innocence — that the prosecution will fail of its own weight, that a denial in the witness box is enough — you are heading for a conviction. This is not ordinary criminal law. A Section 138 prosecution under the Negotiable Instruments Act, 1881 begins with a statutory presumption against you, and that presumption does not melt away simply because you turn up at trial and say it isn’t so.
Cheque dishonour prosecutions under Section 138 of the Negotiable Instruments Act, 1881 are among the most heavily litigated commercial offences in Bangladesh. Every Judges’ Court in Dhaka carries a substantial Section 138 docket, and the appellate corridors of the High Court Division are equally populated with revisions and appeals against conviction or acquittal. Yet for all that volume, a single feature of the statute decides most of these cases at trial — and it is not Section 138 itself. It is Section 118.
This article sets out how the Section 118 presumption operates in a Section 138 case, why an accused who relies on bare denial is almost certain to be convicted, and what the High Court Division of Bangladesh has held about when the presumption is rebutted and when the burden travels back to the complainant.
Section 138 in a single paragraph
Section 138 makes it a criminal offence for the drawer of a cheque to allow that cheque to be returned unpaid by the bank for insufficiency of funds, or because the amount of the cheque exceeds the arrangement made with the bank. Unlike the Indian version of the provision, the Bangladesh statute does not condition the offence on the cheque having been issued “for the discharge of any debt or other liability” — that qualifying language is an Indian amendment and is not part of our law. The complainant must prove three things: that a cheque was drawn by the accused on his own account, that it was returned unpaid by the bank for insufficiency of funds, and that the statutory notice was duly served and the demand not satisfied within the prescribed period. The substantive offence is criminal, but the proof framework borrows heavily from the law of evidence applicable to negotiable instruments — and that is where Section 118 takes over.
The Section 118(a) presumption
Section 118(a) of the Negotiable Instruments Act, 1881 reads:
“Until the contrary is proved, the following presumptions shall be made: — (a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration …”
The provision is short, but its procedural effect is enormous. Once the complainant has discharged the foundational requirement of proving that the cheque was issued by the accused — usually by proving the signature, or by the accused’s own admission in cross-examination — the law itself supplies the next link in the chain. The Court is bound to presume that the cheque was given for consideration. The complainant is not required, at the prima facie stage, to lead any further evidence on what the underlying transaction or consideration was.
The burden quietly flips
What follows is, in practice, the most decisive moment in a cheque case — and the one most often missed by accused persons appearing without proper advice. Once the statutory presumption arises, the evidential burden shifts to the accused. He must produce evidence to displace the presumption. He cannot simply step into the witness box and assert that there was no debt, no transaction, no consideration. A bare denial is not evidence in any meaningful sense; it is the opposite of evidence.
The High Court Division has restated this principle in a series of recent judgments. In A.H. Ershadul Haque vs. The State and Ors. (06.02.2023; reported at 75 DLR (2023) 447; LEX/BDHC/0016/2023; 11 LNJ (2022) 205), the Court held that the Section 118 presumption stands until rebutted by credible evidence, and that the standard for rebuttal — while not “beyond reasonable doubt” — must rise above a mere assertion. The accused must put forward material capable of being weighed.
The standard of rebuttal: preponderance of probabilities
The accused does not have to prove his defence to the criminal standard. He has to make his version more probable than the complainant’s on the balance of probabilities. This is a familiar civil standard, deliberately calibrated to give a bona fide defendant a real opportunity to raise a defence without conscripting him into proving a negative beyond reasonable doubt.
What does this look like in practice? Examples that the High Court Division and trial courts have accepted as capable of rebutting the presumption include:
contemporaneous documentary evidence that the cheque was issued as security for a transaction that was later cancelled or never materialised;
banking records or correspondence showing that the underlying loan or sale was already discharged at the date of the cheque;
independent witness testimony that the cheque was a blank cheque deposited with a third party and later filled in without authority;
proof that the alleged consideration was illegal or unenforceable (for example, a gambling debt or an unregistered moneylending transaction).
What is not capable of rebutting the presumption is the accused stepping into the witness box, denying the debt, and offering nothing else. Yet that is the defence run by a great many accused persons in the Judges’ Courts. The trial result is predictable.
When the burden travels back
If, and only if, the accused has discharged his evidential burden, the procedural picture changes again. The presumption no longer assists the complainant. The complainant must then prove the existence of consideration as an ordinary matter of fact, to the criminal standard, by leading positive evidence of the transaction the cheque was issued against. This is the second layer of the framework, often overlooked because so few defences ever reach it.
The position was articulated in Shafiqul Islam (Md.) and Ors. vs. Bangladesh and Ors. (03.12.2012; reported at 2016 (7) ALR 1; 68 DLR (2016) 283; LEX/BDHC/0253/2012; 2 SCOB (2015) HCD 1) and reaffirmed in Md. Nurul Hakim vs. The State and Ors. (11.06.2023; reported at LEX/BDHC/0057/2023; 11 LNJ (2022) 174): proof of ex*****on — or the accused’s admission of his signature — is sufficient to raise the presumption of consideration; positive proof of the debt is not required at the prima facie stage. The complainant does not lose the benefit of the presumption unless and until the accused puts something credible on the record.
A note on appeals against acquittal
Trial courts in Bangladesh sometimes acquit Section 138 accused on the strength of bare denial — treating the criminal-standard requirement of proof as displacing the statutory presumption from the outset. That approach inverts the statute. Section 118(a) is not a piece of guidance the trial court may set aside on a discretionary view of the evidence; it is a positive rule of substantive law. Where the trial court has acquitted without engaging with the presumption, the appellate corrective is to set aside the acquittal and direct the trial court to re-test the evidence under the correct framework. That is exactly what the High Court Division has done in successive recent appeals against acquittal — including in matters in which our chambers has appeared.
What this means in practice
For complainants — banks, NBFIs, suppliers, business creditors: the statutory framework is in your favour, but only if the foundational link is properly proved. Make sure your complaint and your prosecution witness lead clear evidence of ex*****on — the signature, the chequebook, the account — and that the statutory notice and demand are unimpeachable. The presumption then does the rest of the work for you, unless and until the accused produces something real.
For accused persons: the standard advice from a defence perspective is bracing. A defence in a cheque dishonour case has to be designed and proved, not merely asserted. If your defence is that the cheque was issued as security and not against a present debt, locate the underlying agreement, the correspondence, the parallel security. If your defence is that the loan was already repaid, locate the receipts, the bank statements, the loan-account closure letter. If your defence is that the cheque was misused, locate the witness who can speak to where the chequebook was, when, and in whose hands. Without this, the presumption stands and a conviction will follow.
Conclusion. The architecture of a Section 138 prosecution in Bangladesh is shaped less by the offence-creating provision than by the law of presumptions in Section 118. The complainant proves the cheque; the statute presumes consideration; the accused must rebut on the balance of probabilities by credible evidence; only then does the burden return to the complainant. A defence that fails to engage with this framework is a defence that has effectively conceded the case before it has begun.
