Cheque dishonour presumption sustained: bare denial could not rebut liability under the Negotiable Instruments Act.

Statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant once the cheque, its dishonour for insufficiency of funds, service of notice, and non-payment were proved. The accused admitted the signature and issuance of the cheque but produced no cogent evidence to rebut the presumption that it was issued towards a legally enforceable debt or liability. A bare denial and the plea of a post-dated security cheque were held insufficient. The trial court's doubts over consideration and financial capacity were found erroneous, and the acquittal was set aside; the accused was held guilty under Section 138 and fined with compensation imposed.

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Issues: Whether the acquittal for the offence under Section 138 of the Negotiable Instruments Act, 1881 was unsustainable in view of the statutory presumptions under Sections 118 and 139, and whether the complainant had proved the essential ingredients of the offence.

Analysis: The cheque, its presentation, dishonour for insufficiency of funds, service of statutory notice, and non-payment within the stipulated period stood established from the evidence and documents on record. The accused admitted the signature and issuance of the cheque and claimed that it was a post-dated security cheque, but led no cogent evidence to rebut the presumptions under Sections 118 and 139. A bare denial was held insufficient to displace the presumption that the cheque was issued towards a legally enforceable debt or liability. The reasons adopted by the trial court to doubt consideration and the complainant's financial capacity were held to be erroneous because the statutory presumptions operated in the complainant's favour until rebutted by probable defence evidence.

Conclusion: The acquittal was set aside, the accused was held guilty under Section 138 of the Negotiable Instruments Act, 1881, and a fine with compensation was imposed.

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