Demand notice through counsel and statutory presumptions under the Negotiable Instruments Act sustained, leading to conviction

A demand notice under Section 138(b) of the Negotiable Instruments Act was held valid even when issued through an authorised advocate and not signed personally by the complainant, since the statute requires a written demand and the object of notice would be defeated by insisting on the complainant's signature. On the merits, the statutory presumptions under Sections 118 and 139 operated once execution of the cheques and dishonour were proved, and the accused failed to rebut them with a credible probable defence; unsupported cash-payment assertions and inconsistent surrounding records were insufficient. The acquittal was set aside and conviction under Section 138 followed.

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Issues: (i) whether a demand notice under Section 138(b) of the Negotiable Instruments Act, 1881 is invalid merely because it is issued through counsel and does not bear the complainant's signature; (ii) whether the accused rebutted the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 and established that the cheques were not issued towards a legally enforceable liability.

Issue (i): Whether a demand notice under Section 138(b) of the Negotiable Instruments Act, 1881 is invalid merely because it is issued through counsel and does not bear the complainant's signature.

Analysis: Section 138(b) requires a written demand notice to be issued within the prescribed time after dishonour. The notice may be issued by an authorised lawyer on behalf of the payee. The statutory object would be defeated if the demand were treated as invalid only because the complainant did not personally sign it. The service of notice was also supported by the postal communication showing delivery.

Conclusion: The demand notice was valid and the objection based on absence of the complainant's signature failed.

Issue (ii): Whether the accused rebutted the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 and established that the cheques were not issued towards a legally enforceable liability.

Analysis: Once the execution of the cheques and the foundational facts of dishonour were proved, the statutory presumption operated in favour of the holder. The burden then lay on the accused to raise a probable defence supported by proof. The defence of cash payment was found unconvincing because it rested on chance witnesses, lacked supporting material showing the source of funds, and was inconsistent with the surrounding documentary record, including the note acknowledging issuance of the cheques. The evidence therefore did not rebut the presumption on the standard required in proceedings under the Act.

Conclusion: The accused failed to rebut the presumption, and the ingredients of the offence under Section 138 stood proved.

Final Conclusion: The acquittal was set aside, the accused was convicted under Section 138 of the Negotiable Instruments Act, 1881, and the appeal succeeded.

Ratio Decidendi: In prosecutions under Section 138 of the Negotiable Instruments Act, 1881, a demand notice may be validly issued through an authorised advocate, and the statutory presumptions under Sections 118 and 139 can be displaced only by proof of a credible and probable defence, not by a bare explanation or unsupported oral version.

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