Cheque dishonour presumptions under the NI Act shift the burden to rebut a legally enforceable debt with credible evidence.

Admission of the cheque and the accused's signature attracts the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881. The burden then shifts to the accused to rebut the presumption of a legally enforceable debt with cogent material; a bare denial or an unsupported plea of misuse of blank cheques is insufficient, especially where no defence evidence is led. On that reasoning, the text states that the acquittal was unsustainable, the offence under Section 138 was made out, and compensation was directed to follow from the fine imposed.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 could be set aside in view of the admitted cheque, admitted signature, and the statutory presumptions under Sections 118 and 139.

Analysis: The cheque was admitted to belong to the accused and the signature was also admitted. In such circumstances, the complainant was entitled to the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881. The burden then shifted to the accused to rebut the presumptions by cogent material showing absence of legally enforceable debt. Mere denial or a bare defence of misuse of blank cheques was not sufficient, particularly when no defence evidence was adduced and the same transaction had already been upheld in connected proceedings.

Conclusion: The acquittal was unsustainable and was set aside. The accused was held guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881.

Final Conclusion: The complaint succeeded, the conviction was restored, and compensation was directed to be paid from the fine imposed.

Ratio Decidendi: Admission of the cheque and signature attracts the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, and the accused must rebut them by credible material to displace the existence of a legally enforceable debt.

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