Cheque dishonour presumptions upheld where execution was shown and rebuttal evidence was absent; sentence was later moderated.

In a cheque dishonour prosecution under Section 138 of the Negotiable Instruments Act, the complainant's lending capacity was upheld because it was not specifically disputed at the earliest stage and was supported by evidence of agricultural land and cultivation. The cheque, drawn on the accused's account, attracted the statutory presumptions under Sections 118 and 139, and the accused failed to rebut them with cogent evidence of theft, forgery, or misuse. The Court also accepted affidavit evidence tendered by the accused, finding no jurisdictional error in its admission. Conviction was sustained, but the sentence was modified by replacing imprisonment with a fine structure and compensation.

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Issues: (i) Whether the complainant had the lending capacity to sustain the prosecution under Section 138 of the Negotiable Instruments Act, 1881; (ii) whether the cheque was issued towards discharge of liability and whether the presumptions under Sections 118 and 139 stood rebutted; (iii) whether the accused could validly tender evidence by affidavit and whether the trial court committed error in accepting it; and (iv) whether the sentence required modification.

Issue (i): Whether the complainant had the lending capacity to sustain the prosecution under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The accused did not specifically dispute the complainant's financial capacity at the earliest stage or in cross-examination. The evidence showed that the complainant owned agricultural land and carried on cultivation, and that assertion was not effectively challenged. On that footing, the challenge to lending capacity was found untenable.

Conclusion: The challenge to the complainant's lending capacity failed.

Issue (ii): Whether the cheque was issued towards discharge of liability and whether the presumptions under Sections 118 and 139 stood rebutted.

Analysis: The cheque was admitted to pertain to the accused's account, and the accused did not promptly set up a consistent case of forgery or theft in the reply notice. The alleged theft of cheque leaves and misuse by another person was not proved through supporting bank evidence, handwriting expert opinion, or proof of prosecution in the collateral complaint. Once execution and account linkage were shown, the statutory presumptions arose, and the accused failed to rebut them by cogent and acceptable evidence.

Conclusion: The cheque was held to have been issued towards discharge of liability and the statutory presumptions were not rebutted.

Issue (iii): Whether the accused could validly tender evidence by affidavit and whether the trial court committed error in accepting it.

Analysis: Although Section 145 of the Negotiable Instruments Act, 1881 was argued to be confined to complainant witnesses, the later binding approach recognised by the Court permitted affidavit evidence in the context of cheque dishonour trials, and the accused had voluntarily filed the affidavit without objection at the trial stage. The objection raised belatedly in revision was therefore not accepted as a jurisdictional error.

Conclusion: Acceptance of the accused's affidavit evidence was upheld.

Issue (iv): Whether the sentence required modification.

Analysis: The conviction was maintained, but the Court took note of the long pendency, the age of the accused, and the need to calibrate the penal consequence. The sentence of imprisonment was therefore replaced by a substantial fine with default imprisonment, while preserving compensation to the complainant.

Conclusion: The sentence was modified by substituting imprisonment with fine and default imprisonment.

Final Conclusion: The conviction under Section 138 was sustained, but the punishment was altered to a fine structure with compensation, resulting in only limited relief to the accused.

Ratio Decidendi: In a cheque dishonour prosecution, once the cheque pertains to the accused's account and execution is established, the presumptions under Sections 118 and 139 operate unless rebutted by cogent evidence; a belated challenge to affidavit evidence will not succeed where the procedure was voluntarily adopted and caused no jurisdictional prejudice.

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