Cheque dishonour presumptions under the Negotiable Instruments Act stand unless the accused shows a probable defence on probabilities.

Once the foundational facts of cheque dishonour are established, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder that the cheque was issued for consideration and a legally enforceable debt. The accused must rebut that presumption by raising a probable defence on a preponderance of probabilities; mere denial or unsupported doubts about the complainant's funds are insufficient. On the facts noted, the conviction under Section 138 was sustained, while the custodial sentence was reduced without disturbing the fine and compensation structure.

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Issues: (i) Whether the conviction for dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881 was sustainable in view of the statutory presumptions under Sections 118 and 139. (ii) Whether the sentence imposed by the High Court required modification.

Issue (i): Whether the conviction for dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881 was sustainable in view of the statutory presumptions under Sections 118 and 139.

Analysis: The cheques were admitted to bear the accused's signature, were drawn on his account, presented within validity, and returned unpaid for insufficiency of funds or closure of account. These foundational facts attracted the presumptions under Sections 118 and 139 that the cheques were issued for consideration and in discharge of a legally enforceable debt. The accused was then required to rebut the presumption by raising a probable defence on a preponderance of probabilities. Mere denial, or criticism of the complainant's source of funds and accounts, was insufficient once the statutory presumption operated. The document acknowledging liability and issuance of post-dated cheques, together with the testimony of the supporting witness, strengthened the complainant's case, while the defence that the transaction was only with the witness remained unsupported by cogent material. The Trial Court's approach in treating want of source-of-funds evidence as fatal after the presumption had arisen was erroneous and perverse.

Conclusion: The conviction under Section 138 of the Negotiable Instruments Act, 1881 was rightly sustained and is affirmed.

Issue (ii): Whether the sentence imposed by the High Court required modification.

Analysis: The monetary punishment imposed by the High Court was maintained, but the custodial component was considered excessive in the circumstances. As the matters involved seven cheques and the complainant was being compensated through the fine structure, the sentence of imprisonment was treated as capable of modification without disturbing the conviction or the fine.

Conclusion: The sentence of imprisonment was modified, while the fine and compensation structure was upheld.

Final Conclusion: The appeal succeeded only to the limited extent of reduction and restructuring of the custodial sentence, while the conviction for cheque dishonour and the fine based reliefs were maintained.

Ratio Decidendi: Once the foundational facts of a cheque dishonour case are established, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operate in favour of the holder and can be displaced only by a probable defence proved on a preponderance of probabilities; bare denial or conjectural doubts do not suffice.

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