Statutory presumption in cheque dishonour cases upheld where admitted signatures failed to rebut legally enforceable liability.

Admission of signatures on a cheque and accompanying undertaking attracted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, shifting the burden to the accused to rebut a legally enforceable liability by a probable defence on a preponderance of probability. The defence that blank cheque leaves and signed stamp papers were misused did not displace those presumptions or undermine the debt liability. The trial court had failed to apply the reverse onus rule, and the High Court was justified in reversing the acquittal and convicting the appellants. The conviction was upheld.

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Issues: Whether the High Court erred in reversing the acquittal and convicting the appellants for dishonour of cheque, and whether the defence successfully rebutted the statutory presumptions under the Negotiable Instruments Act, 1881.

Analysis: Once the drawer's signatures on the cheque and accompanying undertaking were admitted, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 came into play and the burden shifted to the accused to rebut them by raising a probable defence on the standard of preponderance of probability. The defence based on alleged misuse of blank cheque leaves and signed stamp papers did not displace the presumption, and the evidence led by the defence did not undermine the existence of a legally enforceable liability. The trial court had failed to apply the reverse onus rule, and the High Court was justified in correcting that error while exercising appellate jurisdiction over the acquittal.

Conclusion: The conviction was upheld, and the appellants failed to rebut the statutory presumption or establish that the High Court had acted illegally in reversing the acquittal.

Ratio Decidendi: Admission of signatures on a cheque attracts the statutory presumption of legally enforceable liability under the Negotiable Instruments Act, and the accused must rebut that presumption by a probable defence meeting the standard of preponderance of probability.

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