Statutory presumption under cheque dishonour law upheld where security-cheque defence failed to rebut liability.

Admission of issuance of the cheque attracted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act in favour of the complainant, and the accused failed to rebut them with reliable oral or documentary evidence. The defence that the cheque was only a security cheque, and that a contemporaneous document and transfer of the lorry supported that version, was rejected as unsubstantiated and treated as an afterthought; there was also no reply notice or other material to displace the presumption. Repeated presentation of the cheque within its validity period did not negate liability. The concurrent conviction and sentence under Section 138 were upheld and the revision was dismissed.

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Issues: Whether the concurrent conviction under Section 138 of the Negotiable Instruments Act, 1881 was sustainable in view of the defence that the cheque was issued only as security and that the presumption under Sections 118 and 139 stood rebutted.

Analysis: The issuance of the cheque was admitted, and therefore the statutory presumptions as to consideration and existence of a legally enforceable debt arose in favour of the complainant. The defence version based on a security cheque and the alleged transfer of the lorry was not supported by reliable oral or documentary evidence. The alleged contemporaneous document was treated as an afterthought, and there was no reply notice or other material to displace the presumption. The contention that the cheque was presented twice also did not help, since repeated presentation of a cheque within its validity period is permissible in law and does not by itself negate liability. In the absence of proof rebutting the statutory presumption, the findings of the courts below were not shown to be perverse.

Conclusion: The conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 were upheld and the revision was dismissed.

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