Cheque dishonour presumption and director liability upheld where lost-cheque defence failed to rebut statutory presumptions.

Where issuance, dishonour and statutory notice in cheque dishonour cases were proved, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant and were not rebutted on the preponderance standard. The accused's bare plea that the cheques were lost, unsupported by probable evidence and contradicted by the record, failed to displace that presumption. The challenge based on absence of a company resolution and insufficient averments under Section 141 also failed because the complaint specifically stated that the directors were in charge of and responsible for the company's affairs, and the cheques carried the company seal. The acquittal was therefore set aside and conviction directed.

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Issues: Whether the acquittal in the cheque dishonour cases was liable to be set aside and the accused convicted under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The complainant proved issuance and dishonour of the cheques, service of notice, and the supporting loan application and bank extract. The accused admitted his signature on the cheques and the contents were written by him, but the plea that the cheques were lost was not supported by probable evidence. The earlier police letter did not specify the missing cheques or explain how the cheques reached the complainant, and the subsequent private complaint was filed only after notice. The statutory presumption under Sections 118 and 139 operated in favour of the complainant and was not rebutted on the standard of preponderance of probabilities. The objection based on absence of company resolution and want of pleadings under Section 141 also failed because the complaint contained specific averments that the directors were in charge of and responsible for the company's affairs, and the cheques bore the company seal.

Conclusion: The acquittal was unsustainable. The accused were held liable for the offence under Section 138 of the Negotiable Instruments Act, 1881, and the conviction was directed.

Ratio Decidendi: Once execution of the cheque and service of notice are established, the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 arises and can be displaced only by a probable defence; a bare plea of lost cheques, without credible evidence, does not rebut the presumption, and specific averments that directors ad responsibility for the company's affairs satisfy Section 141.

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