Statutory presumptions in cheque dishonour cases apply once signature and issuance are proved; unsupported security-cheque defence fails.

In a prosecution under Section 138 of the Negotiable Instruments Act, once the drawer's signature on the cheque is admitted and issuance of the cheque is proved, the presumptions under Sections 118(a) and 139 operate in favour of the complainant. The burden then shifts to the accused to rebut those presumptions with credible evidence showing that the cheque was not issued towards a legally enforceable debt or liability. A bare plea that the cheque was given as a blank security cheque, without supporting evidence, is insufficient. The court found that the trial court had misapplied the statutory presumptions and ignored material evidence, so the acquittal was set aside and the conviction and fine with compensation were sustained.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act was unsustainable in view of the proved execution of the cheque, the admitted signature of the accused, and the statutory presumptions under Sections 118(a) and 139.

Analysis: The complainant established the transaction, issuance and handing over of the cheque through oral evidence and supporting documents. The accused admitted the signature on the cheque but failed to adduce any evidence to show that the cheque was not issued towards a legally enforceable debt or liability. Once the signature on the cheque was admitted and execution was proved, the statutory presumptions under the Negotiable Instruments Act operated in favour of the holder, and the burden shifted to the accused to rebut them. The defence that the cheque was given as a blank security cheque remained unsubstantiated. The trial court had therefore erred in disregarding the material evidence and in failing to apply the presumption correctly.

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

Ratio Decidendi: Once the drawer's signature on the cheque is admitted and the issuance of the cheque is proved, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operate in favour of the complainant, and the accused must rebut them by credible evidence of non-liability.

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