Security cheque does not defeat statutory presumption; accused must rebut liability by evidence, not mere denial.

A cheque described as security does not, by itself, displace the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act once execution and signature are admitted. The accused must raise a probable defence and lead evidence showing that no legally enforceable liability existed or that the debt had been discharged; mere assertion is insufficient. On the facts, the accused admitted issuance and signature but produced no rebuttal evidence, so the acquittal was held unsustainable. The complaint was allowed and the cheque-related liability, including compensation, was affirmed.

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Issues: Whether a cheque issued as security attracts the statutory presumption under the Negotiable Instruments Act and whether, on the facts, the accused rebutted the presumption so as to sustain the acquittal.

Analysis: The statutory scheme under Sections 118 and 139 creates a rebuttable presumption that a cheque was issued for consideration and in discharge of a debt or liability once execution and signature are admitted. A cheque described as security does not, by itself, displace that presumption. The presumption can be rebutted only by raising a probable defence and leading evidence showing that the liability was not legally enforceable or that the amount due had been paid. On the facts, the accused admitted issuance and signature, but led no evidence to rebut the presumption or to show discharge of the liability. The earlier approach treating the cheque as security as sufficient to defeat the complaint was therefore erroneous.

Conclusion: The acquittal was unsustainable. The complaint was allowed, the accused was held liable to pay the cheque amount and compensation, and the conviction-related consequence was affirmed.

Ratio Decidendi: A cheque issued as security does not, by that fact alone, negate the presumption of legally enforceable debt or liability under Sections 118 and 139 of the Negotiable Instruments Act, 1881, and the accused must rebut that presumption by evidence.

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