Statutory notice and rebuttable presumptions under the Negotiable Instruments Act can defeat a cheque dishonour conviction.

Proof of service of the statutory notice and expiry of the 15-day waiting period are essential to complete an offence under Section 138 of the Negotiable Instruments Act, so a complaint filed before those requirements are satisfied is premature and cannot sustain a conviction. The statutory presumptions under Sections 118 and 139 are rebuttable on a preponderance of probabilities, and an accused may rely on documentary material and surrounding circumstances to show a probable defence. On the stated record, the defence was accepted, the complainant failed to displace it, and the conviction was set aside with acquittal.

---

---

Issues: (i) whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 was maintainable in the absence of proof of service of statutory notice and expiry of the statutory waiting period; (ii) whether the accused had rebutted the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 by raising a probable defence.

Issue (i): whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 was maintainable in the absence of proof of service of statutory notice and expiry of the statutory waiting period

Analysis: Service of notice and the lapse of 15 days from receipt of such notice are essential components of the offence under Section 138. The date of service of notice is material for determining the accrual of cause of action. Where the complainant failed to prove actual service of notice, and no finding was recorded by the courts below on the date of receipt, the complaint filed before expiry of the statutory period could not be treated as maintainable. The complaint was therefore premature and the conviction founded on it could not stand.

Conclusion: The complaint was not maintainable and the finding of guilt under Section 138 could not be sustained.

Issue (ii): whether the accused had rebutted the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 by raising a probable defence

Analysis: The statutory presumption under Sections 118 and 139 is rebuttable on the standard of preponderance of probabilities. The accused relied on documentary material and surrounding circumstances to support the plea that the cheque amount had already been repaid and that a receipt had been issued. The courts below did not examine the defence on the correct standard and did not properly apply the reverse-onus principle. On the record, the defence amounted to a probable defence and the burden shifted back to the complainant, who failed to discharge it.

Conclusion: The accused successfully rebutted the statutory presumption and established a probable defence.

Final Conclusion: The revision succeeded, the conviction was set aside, and the accused was acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, proof of service of statutory notice and expiry of the mandatory waiting period is necessary to complete the offence, and the statutory presumption under Sections 118 and 139 can be displaced by a probable defence proved on a preponderance of probabilities.

---