Whether presumption of correctness attached to a negotiable instrument, in terms of Section 118 of the Act, is lost or rebutted if the said instrument-the cheque in present case, is in a mutilated/torn-down condition?

Admittedly, the cheque on the basis of which the suit was instituted by the respondent was torn down/mutilated but the suit was decreed as issuance of the cheque was admitted albeit as a guarantee and given to the arbitrators named in petition for leave to defend but none of them appeared as witness. The core legal issue before this Court is whether presumption of correctness attached to a negotiable instrument, in terms of Section 118 of the Negotiable Instruments Act, 1881 is lost or rebutted if the said instrument-the cheque in present case, is in a mutilated/torn-down condition. Held: The mutilated condition of a negotiable instrument is not sufficient to hold that presumption of correctness is no more attached with it if the key information of an instrument such as the name of payee, date, amount, signatures etc., have not been damaged. In such circumstances, the presumption attached thereto is not lost.

Regular First Appeal-338-21
LIAQAT ALI VS
NOOR AHMAD Mr. Justice Anwaar Hussain
29-05-2024
2024 LHC 3063