Statutory presumption in cheque dishonour cases prevails unless rebutted by credible defence evidence; acquittal set aside.

A conviction under Section 138 of the Negotiable Instruments Act was restored because the cheque was issued towards an admitted business liability, was dishonoured for insufficiency of funds, and statutory notice went unanswered. The accused's claim that the cheque had been given earlier to a third party and that no liability existed was not supported by independent evidence. The complainant's failure to produce account books did not, by itself, rebut the statutory presumption where the surrounding facts supported liability. The trial court erred in shifting the burden of proof to the complainant and in treating the presumption as rebutted without adequate defence evidence, so the acquittal was set aside.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 was liable to be set aside on the ground that the statutory presumption had been wrongly treated as rebutted and the burden of proof had been shifted to the complainant.

Analysis: The cheque issued towards an admitted business liability was dishonoured for insufficiency of funds, and notice was issued and received without payment. The defence of prior issue of the cheque to a third person and absence of liability was not substantiated by independent evidence. The complainant's omission to produce account books did not, by itself, displace the statutory presumption where the surrounding facts, including admitted business dealings and the cheque amount, supported the existence of liability. The trial court had erred in placing the onus on the complainant and in treating the presumption under the Negotiable Instruments Act as rebutted without adequate defence evidence.

Conclusion: The acquittal was unsustainable and was set aside; the appeal was allowed in favour of the appellant.

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