Statutory presumptions under the NI Act cannot sustain conviction without proof of the debt, cheque transaction, and issuance.

In a prosecution under Section 138 of the Negotiable Instruments Act, statutory presumptions under Sections 118 and 139 operate only after foundational facts of the debt, cheque transaction, and issuance are established. Where the complainant could not state the date of the alleged loan, produced no documentary proof of funds, and gave contradictory versions about the cheque's preparation, the evidentiary basis for conviction failed. The trial court treated these lacunae as fatal and acquitted the accused, and the appellate reversal was found unsustainable because the presumptions could not cure the serious gaps in proof. The accused was therefore entitled to acquittal.

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Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act could be sustained when the complainant's evidence was riddled with material contradictions and the trial court had acquitted the accused.

Analysis: The complainant was unable to state the date on which the alleged loan was advanced, failed to produce documentary proof of the asserted source of funds, and gave contradictory versions on who wrote the cheque and how it was filled up. The trial court treated these defects, along with the absence of clear proof of issuance of the cheque in discharge of a legally enforceable debt, as fatal to the prosecution case and acquitted the accused. The High Court reversed that finding mainly on the basis of the statutory presumptions under Sections 118 and 139 and the absence of a reply notice, but did not properly examine the serious evidentiary lacunae noted by the trial court. In a prosecution under Section 138, the foundational facts must be shown before the presumptions can operate effectively.

Conclusion: The conviction and sentence could not be sustained; the appellate reversal of acquittal was erroneous and the accused was entitled to acquittal.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, statutory presumptions cannot by themselves sustain a conviction where the complainant's evidence does not satisfactorily establish the foundational facts of the debt, the cheque transaction, and the circumstances of issuance.

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