Cheque dishonour liability survives where statutory presumption remains unrebutted and vicarious liability is supported by evidence.

In a cheque dishonour prosecution, a witness with personal knowledge of the transaction is competent to depose even if he cannot answer collateral questions. Once execution of the cheque is proved, the presumption under the Negotiable Instruments Act applies and the accused must raise a probable defence; the complainant is not automatically required to prove source of funds. A cheque is not shown to be issued for a time-barred debt merely because limitation is alleged, and an argument based on undisclosed funds or Section 23 of the Contract Act does not defeat liability where the debt is otherwise established. Concurrent findings fastening direct and vicarious liability on the trust-related accused were left undisturbed.

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Issues: (i) whether the son of the complainant was competent to depose on behalf of the complainant in the cheque dishonour prosecution; (ii) whether the complainant proved the underlying debt and the accused rebutted the statutory presumption under the Negotiable Instruments Act, including on the question of source of funds; (iii) whether the cheque was issued towards a time-barred liability and whether the plea of black money and Section 23 of the Contract Act, 1872 could defeat the prosecution; (iv) whether vicarious liability could be fastened on the petitioner associated with the trust.

Issue (i): whether the son of the complainant was competent to depose on behalf of the complainant in the cheque dishonour prosecution.

Analysis: The witness was not shown to be lacking in knowledge of the transaction. His evidence and cross-examination indicated personal awareness of the dealings, the execution of the promissory notes and the issue of the cheque. In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, a witness who has relevant personal knowledge is competent to depose, and mere inability to answer collateral questions does not discredit his testimony.

Conclusion: The witness was held to be competent, and the challenge to his locus to testify failed.

Issue (ii): whether the complainant proved the underlying debt and the accused rebutted the statutory presumption under the Negotiable Instruments Act, including on the question of source of funds.

Analysis: The cheque was supported by two promissory notes for Rs. 20 lakhs and Rs. 15 lakhs. Once execution of the cheque was established, the presumption under Section 139 of the Negotiable Instruments Act, 1881 operated, and the burden shifted to the accused to raise a probable defence. The Court held that the accused failed to produce material capable of displacing that presumption. The complaint and surrounding circumstances, including admissions in the contemporaneous police complaint, supported the complainant's version. The Court further held that the complainant was not required, as a matter of universal rule, to prove source of funds merely because the accused denied liability.

Conclusion: The debt was held proved and the statutory presumption remained unrebutted, against the accused.

Issue (iii): whether the cheque was issued towards a time-barred liability and whether the plea of black money and Section 23 of the Contract Act, 1872 could defeat the prosecution.

Analysis: The earlier claim had already been pursued in civil proceedings within limitation, and the impugned cheque was treated as having given rise to a fresh cause of action. The Court held that the cheque was not shown to have been issued for a time-barred debt. The argument that the loan was unenforceable because the complainant had not disclosed the funds in income tax records and that the transaction was void under Section 23 of the Contract Act, 1872 was rejected as untenable. A debtor cannot avoid repayment on the ground that the creditor's funds were allegedly undisclosed or irregular, once the liability is otherwise established.

Conclusion: The plea of limitation and the plea based on alleged illegality of source of funds were rejected, against the accused.

Issue (iv): whether vicarious liability could be fastened on the petitioner associated with the trust.

Analysis: The trust deed and surrounding facts showed that the petitioner was the founder and had effective control over the trust's affairs. The cheques and promissory notes were issued in the trust's name and were signed by the managing trustee. On the evidence, the Court found no reason to interfere with the concurrent findings fastening liability on the petitioner along with the trust and the other concerned accused.

Conclusion: Vicarious and direct liability were upheld, against the accused.

Final Conclusion: The Court found no illegality or impropriety in the concurrent findings of the courts below and declined revisional interference, leaving the conviction and sentence undisturbed.

Ratio Decidendi: In revision, concurrent findings based on evidence will not be disturbed absent perversity or jurisdictional error, and in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 the statutory presumption of liability continues unless the accused discharges the burden by raising a probable defence.

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