Cheque dishonour presumptions under the Negotiable Instruments Act operate unless rebutted by probable defence and evidence.

Once issuance of the cheque and its dishonour for insufficiency of funds were proved, the statutory presumptions under the Negotiable Instruments Act operated in favour of the holder, and the complainant's evidence with bank records also established service of the demand notice. A bare, inconsistent denial by the accused, unsupported by probable material, was held insufficient to rebut those presumptions on a preponderance of probabilities. The appellate acquittal was therefore set aside, the conviction under Section 138 was restored, and the custodial sentence was modified to a fine with default imprisonment and compensation to the complainant.

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Issues: (i) Whether the complainant had proved the ingredients of the offence under Section 138 of the Negotiable Instruments Act, 1881, including issuance of the cheque, its dishonour for insufficiency of funds, and service of demand notice. (ii) Whether the accused had rebutted the statutory presumptions under Sections 118, 139 and 146 of the Negotiable Instruments Act, 1881 so as to sustain the appellate acquittal. (iii) Whether the sentence required interference on the facts of the case.

Issue (i): Whether the complainant had proved the ingredients of the offence under Section 138 of the Negotiable Instruments Act, 1881, including issuance of the cheque, its dishonour for insufficiency of funds, and service of demand notice.

Analysis: The evidence of the complainant and the bank officials established that the cheque was issued by the accused, presented for collection, returned unpaid for insufficiency of funds, and that the statutory demand notice was served. The missing physical cheque did not discredit the prosecution because the bank witnesses proved the transaction chain and the dishonour memo and related records supported the complainant's case. The factual foundation for invoking the statutory presumption was therefore made out.

Conclusion: The ingredients of the offence were proved in favour of the complainant.

Issue (ii): Whether the accused had rebutted the statutory presumptions under Sections 118, 139 and 146 of the Negotiable Instruments Act, 1881 so as to sustain the appellate acquittal.

Analysis: Once issuance of the cheque and dishonour were established, the presumptions under the Act operated in favour of the holder of the cheque. The accused offered only a bare and inconsistent defence and adduced no evidence to show that the cheque was not issued towards a debt or liability. A mere denial was held insufficient to rebut the presumption, which can be displaced only by probable material showing non-existence of liability on a preponderance of probabilities. The appellate court had erred in disregarding the statutory presumptions and the proved bank records.

Conclusion: The presumptions were not rebutted and the appellate acquittal could not stand.

Issue (iii): Whether the sentence required interference on the facts of the case.

Analysis: While restoring the conviction, the Court found that the sentence of rigorous imprisonment imposed by the trial court required modification. The fine was considered an appropriate substitute with a default sentence, and the amount was directed to be paid to the complainant as compensation.

Conclusion: The conviction was restored with modification of sentence.

Final Conclusion: The revision succeeded, the appellate judgment was set aside, the conviction under Section 138 of the Negotiable Instruments Act, 1881 was restored, and the punishment was modified to a fine with default imprisonment.

Ratio Decidendi: Once issuance of the cheque and its dishonour are proved, the statutory presumptions in favour of the holder operate and can be displaced only by a probable defence supported by material evidence; a bare denial is insufficient.

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