Cheque dishonour presumptions and deemed service of demand notice upheld in prosecution under negotiable instruments law.

In a cheque dishonour prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumptions under Sections 118 and 139 operated once the cheque, dishonour, and loan transaction were proved. The accused's bare denial and claim that the cheque was given as security were insufficient to make the non-existence of liability probable, so the finding of liability was upheld. A demand notice sent by registered post to the correct address was treated as duly served where postal records showed repeated visits and avoidance or refusal, and the accused led no contrary evidence. The conviction and modified sentence were therefore affirmed.

---

---

Issues: (i) whether the accused rebutted the statutory presumptions arising from the admitted cheque and loan transaction so as to displace liability under Section 138 of the Negotiable Instruments Act, 1981; (ii) whether the statutory demand notice was duly served or could be deemed to have been served on the accused.

Issue (i): whether the accused rebutted the statutory presumptions arising from the admitted cheque and loan transaction so as to displace liability under Section 138 of the Negotiable Instruments Act, 1981

Analysis: The cheque, its dishonour for insufficiency of funds, and the underlying loan transaction were established by the complainant's oral and documentary evidence. The accused did not deny borrowing the amount or executing the cheque, but relied only on the explanation that a blank cheque had been given as security and later misused. The statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1981 operated against the drawer once the foundational facts were proved. To rebut those presumptions, the accused was required to bring on record facts or evidence making the non-existence of liability probable. Mere suggestion in cross-examination and bare denial were insufficient.

Conclusion: The accused failed to rebut the statutory presumptions, and the finding of liability under Section 138 of the Negotiable Instruments Act, 1981 was upheld.

Issue (ii): whether the statutory demand notice was duly served or could be deemed to have been served on the accused

Analysis: The notice was sent by registered post to the correct address. The postal endorsement and the postman's report showed repeated visits and refusal or avoidance by the household inmates, with the addressee stated to be out of station. In such circumstances, service could be treated as duly effected or deemed to have been effected. The accused did not dislodge this material by any contrary evidence.

Conclusion: The demand notice was treated as duly served on the accused.

Final Conclusion: The conviction and modified sentence for the cheque dishonour offence were affirmed, and no interference with the revisional challenge was warranted.

Ratio Decidendi: In a cheque dishonour prosecution, once the foundational facts are proved, the statutory presumptions as to debt and liability can be rebutted only by proof or probable evidence, and a demand notice sent to the correct address may be deemed served where the addressee avoids receipt.

---