Statutory presumptions under the Negotiable Instruments Act prevailed where cheque dishonour was proved and rebuttal evidence was absent.

Once cheque issuance and dishonour were proved by oral and bank evidence, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the holder, and the accused had to rebut them on a preponderance of probabilities with credible material. Bare denial, an unsubstantiated plea of theft or misuse, and failure to produce the alleged police complaint were insufficient to displace those presumptions. Non-production of the complainant's income-tax return was not treated as decisive where the transaction and liability were otherwise established. The acquittal was set aside and conviction under Section 138 followed.

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Issues: Whether the acquittal recorded under Section 138 of the Negotiable Instruments Act was unsustainable in view of the statutory presumptions under Sections 118 and 139 and the evidence of debt, cheque issuance, dishonour, and notice.

Analysis: The cheque issuance and dishonour were supported by oral and bank evidence, and the complainant's witness proved the hand-loan transaction. Once execution of the cheque and its dishonour were established, the presumptions under Sections 118 and 139 operated in favour of the holder. The accused was required to rebut those presumptions on a preponderance of probabilities by credible material. Bare denial, an unsubstantiated plea of theft or misuse, and failure to produce the alleged police complaint were insufficient to displace the presumptions. Non-production of income-tax return was not treated as decisive against the complainant when the other evidence established the transaction and liability.

Conclusion: The acquittal was set aside, the accused was held guilty under Section 138 of the Negotiable Instruments Act, and conviction followed.

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