Security cheque defence failed where statutory presumptions under the Negotiable Instruments Act were not rebutted, and conviction stood.

Cheques issued after a loan was advanced were not treated as mere security cheques, because the complainant's evidence showed an existing debt and the accused admitted issuance of the cheques but led no evidence to rebut the claim. The statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operated in favour of the holder, and the accused failed to establish a probable defence to displace them. On that evidence, liability under Section 138 was made out, and the conviction was upheld with no basis for revisional interference.

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Issues: Whether cheques said to have been issued as security for a loan could escape liability under Section 138 of the Negotiable Instruments Act, 1881, and whether the conviction could be interfered with in revision.

Analysis: The complainant's evidence showed that the loan was advanced before the cheques were issued and the accused did not adduce any evidence to rebut the complainant's case. Once issuance of the cheques was admitted, the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 operated in favour of the complainant that the cheques were issued for discharge of debt or liability. Those presumptions were rebuttable, but the accused failed to discharge the initial burden by showing a probable defence. On the evidence on record, the contention that the cheques were merely security cheques was not accepted.

Conclusion: The conviction under Section 138 of the Negotiable Instruments Act, 1881 was upheld and no ground for revisional interference was made out.

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