Negotiable Instruments Act, Section 146

Negotiable Instruments Act, Section 146: Bank’s Slip as Prima Facie Evidence of Dishonour

Section 146 of the Negotiable Instruments Act, 1881 provides that the court shall presume the fact of dishonour of a cheque upon production of the bank’s slip or return memo bearing the official mark of the bank, unless the contrary is proved.

The provision simplifies proof of dishonour in cheque bounce cases and facilitates the speedy disposal of proceedings under Section 138.

1. Purpose of Section 146

The main object of Section 146 is to simplify the process of proving cheque dishonour, reduce procedural delays, and avoid the need to examine bank officials in every case.

The provision facilitates the speedy disposal of cheque dishonour matters and strengthens the overall efficiency of proceedings under the Act.

2. Presumption of Dishonour

The section provides that the court shall presume the fact of dishonour where a bank slip or return memo bearing the official mark of the bank is produced.

Accordingly, the complainant is not required to independently prove the fact of dishonour in the first instance before the court.

3. Meaning of Bank’s Slip or Memo

A bank slip or return memo is a document issued by the bank when a cheque is returned unpaid and generally contains details of the cheque and the date of return.

It also specifies the reason for dishonour, such as insufficient funds or stop-payment instructions, and serves as important evidence in cheque dishonour proceedings.

4. Official Mark of the Bank

The presumption under Section 146 applies only where the bank slip or return memo bears the official mark or endorsement of the bank.

This requirement ensures the authenticity and reliability of banking records, and the official endorsement serves as prima facie proof of dishonour.

5. Meaning of Prima Facie Evidence

Prima facie evidence means evidence that is sufficient to establish a fact unless it is rebutted by contrary evidence.

Accordingly, the court initially treats the dishonour as proved and shifts the burden to the accused, though the presumption remains rebuttable and not conclusive.

6. Rebuttable Nature of Presumption

The section specifically provides that the presumption operates “unless and until such fact is disproved,” allowing the accused to challenge the correctness of the bank memo.

The accused may produce evidence to show that dishonour did not actually occur, but until such fact is disproved, the court proceeds on the basis that the cheque was dishonoured.

7. Importance in Cheque Dishonour Cases

Before the introduction of Section 146, complainants often had to summon bank officials solely to prove the dishonour of a cheque in court.

The provision reduces this procedural burden, saves judicial time, speeds up trial proceedings, and simplifies evidentiary requirements in cheque dishonour cases.

8. Commercial Importance

Section 146 is commercially significant because it facilitates quick adjudication of cheque bounce cases, reduces procedural formalities, and enhances the efficiency of banking litigation.

The provision strengthens confidence in cheque transactions and supports the smoother enforcement of financial liabilities arising from dishonoured cheques.