Statutory presumptions in cheque dishonour cases survive bare denial unless the accused rebuts liability with credible evidence.

In a prosecution for cheque dishonour, once the drawer admits the cheque and signature, the Court must presume under the Negotiable Instruments Act that the cheque was issued for consideration and in discharge of a legally enforceable liability. Those presumptions are rebuttable, but the accused must displace them by a probable and credible defence on a preponderance of probabilities; a bare denial is not enough. The trial court erred in treating the denial of the agreement and signatures as sufficient rebuttal despite the absence of reliable evidence. The acquittal was set aside and the offence was held proved.

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Issues: Whether the acquittal under Section 138 of the Negotiable Instruments Act was unsustainable because the cheque was issued towards a legally enforceable debt and the statutory presumptions under Sections 118 and 139 were not rebutted.

Analysis: The cheque was admitted to bear the drawer's signature and had been dishonoured for insufficiency of funds. In proceedings under Section 138, Sections 118 and 139 require the Court to presume consideration and discharge of a debt or liability, though the presumption is rebuttable. The accused must rebut it on a preponderance of probabilities by bringing on record material showing that the debt or liability did not exist. Mere denial, without satisfactory evidence, is insufficient. The trial court erred in treating the denial of the agreement and signatures as enough to displace the statutory presumption, despite the absence of credible rebuttal and despite the surrounding circumstances supporting the complainant's case.

Conclusion: The acquittal was set aside, the offence under Section 138 was held proved, and the accused was convicted.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, once execution of the cheque is admitted, the Court must presume under Sections 118 and 139 that it was issued for consideration and in discharge of a legally enforceable liability, and the accused can defeat the presumption only by a probable and credible rebuttal.

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