A signed cheque triggers presumptions of consideration and legally enforceable liability unless cogently rebutted.

The Respondent/Plaintiff alleged that he advanced a friendly cash loan of ₹6,00,000 to the Appellant/Defendant on 27 February 2020, for repayment by February 2022.

Upon demand, the Appellant issued cheque no. 314023 dated 2 May 2022 for ₹6,00,000. The cheque was dishonoured on 11 May 2022 with the remark “image not clear, present again with paper.”

The Respondent served a legal notice dated 26 May 2022, which was recorded as delivered on 27 May 2022, but payment was not made.

He consequently instituted a recovery suit for ₹6,00,000 with interest.

The Appellant denied taking the loan and contended that the cheque was an old, misplaced cheque that had been misused.

The Trial Court decreed the suit for ₹6,00,000 with pendente lite and future interest at 9% per annum.

The present appeal was filed under Section 96 read with Order XLI Rule 1 and Section 151 CPC.

Whether the Respondent established that the Appellant had incurred a legally enforceable liability of ₹6,00,000 and whether the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881, stood rebutted by the Appellant’s defence that the cheque was old or misplaced.

Whether the alleged inconsistencies regarding the time and circumstances of delivery of the cheque discredited the Respondent’s case.

Whether service of the legal notice could be presumed on the basis of the postal tracking record and Section 27 of the General Clauses Act, 1897.

Whether the Trial Court lacked territorial jurisdiction because the Appellant resided at Tughlakabad, Delhi.

Whether the award of pendente lite and future interest at 9% per annum was sustainable in the absence of an agreed contractual rate of interest.

The Court applied Sections 118(a) and 139 of the Negotiable Instruments Act, 1881, under which a signed cheque raises presumptions regarding consideration and that it was issued in discharge of a debt or liability; these presumptions may be rebutted by cogent evidence showing absence of a legally enforceable liability.

Relying on Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, and Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283, the Court held that even a signed blank cheque voluntarily delivered to the payee attracts the statutory presumption, and the drawer bears the burden of rebuttal.

Section 27 of the General Clauses Act, 1897 permits a presumption of service where a notice is properly addressed and dispatched, supported here by the postal tracking record.

Section 34 CPC empowers the Court to award pendente lite and post-decree interest in its discretion; such discretion must be exercised fairly and judiciously, as recognised in Central Bank of India v. Ravindra, (2002) 1 SCC 367, and Sandeep Goel v. M/s Zavenir Developers Pvt. Ltd., 2026 SCC OnLine Del 4613.

Objections to territorial jurisdiction are subject to the limitations under the CPC where part of the cause of action arose within the Court’s jurisdiction.

The Court found that the Appellant did not dispute that the cheque belonged to him or that it bore his signatures, and his plea that it had been misplaced was unsupported by evidence explaining when, how, or from where it was allegedly lost.

He also failed to produce the relevant cheque book, lodge a police complaint, or otherwise substantiate misuse.

Once issuance of the signed cheque was established, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operated in the Respondent’s favour.

The Appellant’s employment, alleged financial stability, and challenge to the Respondent’s source of funds did not constitute a probable or cogent rebuttal, particularly in view of the cheque issued for the exact loan amount.

The discrepancy as to whether the cheque was delivered at the time of the loan or when repayment was demanded was held immaterial because it did not undermine the admitted connection between the Appellant and the cheque or the underlying liability.

Service of notice was supported by delivery at the Appellant’s correct address as shown by the tracking report, and his bare denial was insufficient to rebut the statutory presumption.

The territorial objection was both belated and meritless since the loan transaction and cheque presentation furnished connecting parts of the cause of action within the relevant jurisdiction.

Finally, the award of 9% interest was a permissible and judicious exercise of discretion under Section 34 CPC.

The award of pendente lite and future interest at 9% per annum was also upheld.

Accordingly, the judgment and decree dated 30 April 2026 were affirmed, the appeal was dismissed, and the pending applications were disposed of.