Section 138 cheque presumption stands unless rebutted by cogent evidence; mere security-cheque denial is insufficient.

In a prosecution under Section 138 of the Negotiable Instruments Act, the complainant's proof of dishonour and assertion that the cheque was issued towards liability was sufficient to trigger the statutory presumption of debt or liability; minor uncertainty about the loan date did not defeat that case where surrounding circumstances supported the transaction. The accused's defence that the cheques were only security cheques failed because a statement under Sections 281 and 313 CrPC is not evidence and mere denial, without cogent defence evidence, cannot rebut the presumption under Section 139. The acquittal was set aside, the accused was convicted under Section 138, and the matter was directed to proceed on sentence.

---

---

Issues: (i) Whether the complainant proved the existence of debt or liability so as to sustain conviction under Section 138 of the Negotiable Instruments Act, 1881; (ii) Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 by the defence of security cheques.

Issue (i): Whether the complainant proved the existence of debt or liability so as to sustain conviction under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: A cheque carries a statutory presumption that it was issued in discharge of a debt or liability. For an offence under Section 138, proof of dishonour coupled with the complainant's assertion that the cheque was issued towards liability is sufficient to shift the burden to the accused. Minor uncertainty about the exact date of advancing the loan did not, by itself, discredit the complainant's testimony, particularly where the surrounding circumstances and cross-examination supported the existence of the loan transaction.

Conclusion: The existence of debt or liability stood proved for the purpose of Section 138, in favour of the complainant.

Issue (ii): Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 by the defence of security cheques.

Analysis: A statement recorded under Sections 281 and 313 of the Code of Criminal Procedure, 1973 is not evidence and cannot by itself rebut the statutory presumption. To displace the presumption, the accused had to lead cogent evidence showing the circumstances in which the cheques were issued. Mere denial, a bare plea that the cheques were security cheques, and an unproved assertion of reply to notice were held insufficient. Since no defence evidence was produced, the presumption remained unrebutted.

Conclusion: The presumption under Section 139 was not rebutted, in favour of the complainant.

Final Conclusion: The acquittal was set aside and the respondent was convicted under Section 138 of the Negotiable Instruments Act, 1881, with the matter directed to proceed on sentence.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the complainant's proof of dishonour and assertion of liability activates the statutory presumption, and the accused can rebut it only by cogent evidence, not by a mere explanation under Sections 281 or 313 of the Code of Criminal Procedure, 1973.

---