Cheque dishonour presumption upheld where signature admitted and statutory notice deemed served under rebuttal burden rules.

Admission of signatures on a cheque triggered the statutory presumption under Sections 118(a) and 139 of the Negotiable Instruments Act that it was issued for discharge of a legally enforceable debt or liability, and the accused failed to rebut that reverse onus on a preponderance of probabilities. The plea that the cheque was only a blank security cheque given to a chit fund was not supported by the defence evidence, no material explained how the cheque reached the complainant, and the accused did not enter the witness box. Statutory notice was also treated as duly served under Section 27 of the General Clauses Act and Section 114 of the Evidence Act, so the acquittal was set aside and conviction under Section 138 followed.

---

---

Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 was sustainable where the accused admitted signatures on the cheque but claimed that it was a blank security cheque given to a chit fund and the trial court treated the complaint as vague.

Analysis: Admission of signatures on the cheque attracted the statutory presumption under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for discharge of a legally enforceable debt or liability. The presumption was a reverse onus presumption and could be displaced only by a probable defence established on a preponderance of probabilities. The accused failed to do so: the defence witness did not support the plea that the cheque had been issued to the chit fund, no material showed how the cheque reached the complainant, and the accused did not step into the witness box. The Court also held that service of statutory notice was proved by the presumption of due service under Section 27 of the General Clauses Act, 1897 read with Section 114 of the Indian Evidence Act, 1872, and mere denial of receipt was insufficient to rebut it. The contention that the notice was defective because the bank return memo used the expression "referred to drawer" was rejected.

Conclusion: The acquittal was erroneous and perverse. The statutory presumption remained unrebutted, the ingredients of Section 138 were established, and the accused were held guilty.

Final Conclusion: The appeals succeeded, the acquittal was set aside, and the conviction under Section 138 of the Negotiable Instruments Act, 1881 followed with consequential directions for payment and default sentence.

Ratio Decidendi: Admission of signature on a cheque attracts the mandatory presumption that it was issued for discharge of a debt or liability, and the accused can rebut it only by a probable defence proved on preponderance of probabilities; statutory notice is also deemed served when properly addressed and posted unless the contrary is shown.

---