Presumption of liability under the Negotiable Instruments Act survives unless rebutted by cogent evidence in cheque dishonour cases.

In a Section 138 Negotiable Instruments Act prosecution, once the cheque, drawer's signature, and statutory notice are established, the court must apply the presumption of liability under Sections 118 and 139. That presumption can be rebutted only by cogent and convincing evidence from the accused; a bare denial, an implausible explanation, or an unsupported defence is insufficient. On the facts noted, the accused did not give reliable evidence to displace the presumption, so the acquittal could not stand and was set aside, with the matter remanded only for sentence and compensation.

---

---

Issues: Whether the acquittal for an offence under Section 138 of the Negotiable Instruments Act, 1881 could be sustained despite proof of the cheques, the drawer's signatures, service of notice, and the accused's failure to rebut the statutory presumption under Section 139.

Analysis: The cheques were not disputed as to signature, and service of statutory notice was accepted. The record also showed repeated requests by the accused for settlement and a signed purshish acknowledging payment of part of the cheque amount and undertaking to pay the balance. The trial court treated the complainant's case as unproved, but the governing scheme of Sections 118 and 139 requires the court to presume that a cheque was issued for discharge of a debt or liability once the foundational facts are established. That presumption can be displaced only by cogent and convincing evidence from the accused. Mere denial, a plausible explanation, or an unsubstantiated defence was insufficient. The accused did not enter the witness box and did not produce reliable evidence to show absence of liability.

Conclusion: The acquittal could not be sustained. The appeal succeeded, the acquittal was set aside, and the matter was remanded to the trial court for the limited purpose of deciding sentence and compensation.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the cheque, signature, and statutory notice are established, the court must draw the presumption of liability under Section 139, and the accused can rebut it only by cogent evidence; a bare or improbable defence does not discharge that burden.

---