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Issues: Whether the accused had rebutted the presumptions arising under Sections 118 and 139 of the Negotiable Instruments Act, 1881 and thereby disproved the existence of a legally enforceable debt so as to avoid conviction under Section 138 of the Negotiable Instruments Act, 1881.
Analysis: The cheque and the signature thereon were not disputed. Once issuance and signature were admitted, the statutory presumptions under Sections 118 and 139 operated in favour of the holder of the cheque. The accused was required to rebut those presumptions on the touchstone of preponderance of probabilities, either by direct evidence or by material circumstances showing that the cheque was not issued towards discharge of a debt or liability. The defence version that the cheque had been issued as security for an earlier transaction was not supported by any document, the reply notice remained unsubstantiated, nothing material emerged in cross-examination of the complainant, and the accused did not enter the witness box. Mere denial was held insufficient to displace the presumptions.
Conclusion: The accused failed to rebut the statutory presumptions and the conviction under Section 138 of the Negotiable Instruments Act, 1881 was upheld.
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