Cheque dishonour presumption under the NI Act survives unless rebutted by a probable defence on preponderance of probabilities.

In a cheque dishonour prosecution, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the cheque holder, including as to the existence of a legally enforceable debt or liability. The accused can rebut that presumption only on a preponderance of probabilities. On the stated evidence, the signed cheque was dishonoured for insufficiency of funds and the defence of loss of a blank signed cheque was found improbable, supported by the absence of any prompt complaint to the bank or police. The presumption was therefore not rebutted, liability stood proved, and the acquittal was held unsustainable; conviction under Section 138 was warranted.

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Issues: Whether the cheque was issued in discharge of an existing legally enforceable liability and whether the acquittal under Section 138 of the Negotiable Instruments Act could be sustained.

Analysis: The statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder of the cheque, including a presumption as to the existence of a legally enforceable debt or liability. The accused may rebut that presumption on the standard of preponderance of probabilities. On the evidence, the cheque was admittedly signed and dishonoured for insufficiency of funds, while the defence version of loss of a blank signed cheque was found improbable in view of the surrounding circumstances, including the absence of any prompt complaint to the bank or police and the overall improbability of the explanation offered.

Conclusion: The presumption in favour of the complainant was not rebutted, the existence of liability stood proved, and the acquittal was unsustainable. The conviction under Section 138 of the Negotiable Instruments Act was warranted.

Ratio Decidendi: In a prosecution for dishonour of cheque, the presumption under Section 139 extends to the existence of a legally enforceable debt or liability, and an accused must rebut it by a probable defence on the standard of preponderance of probabilities.

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