Cheque presumption under the Negotiable Instruments Act sustained where defence failed to rebut legally enforceable liability.

Admission of signature on the cheque, together with proof of the underlying transactions, triggered the presumptions under Sections 118 and 139 of the Negotiable Instruments Act in favour of the complainant. The defence that the cheque was taken as security in chitty dealings and later misused was not supported by evidence sufficient to rebut those presumptions. The absence of the exact cheque amount in the account statements did not defeat the claim where the cheque reflected the aggregate liability arising from the parties' transactions. The cheque was therefore treated as issued in discharge of a legally enforceable liability, and liability under Section 138 was made out.

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Issues: Whether the cheque was issued in discharge of a legally enforceable liability and whether the offence under Section 138 of the Negotiable Instruments Act, 1881 was proved.

Analysis: The signature on the cheque was admitted and the defence version was that the cheque had been taken as security in connection with chitty transactions and later misused. The account statements proved the underlying transactions between the parties. Once execution and delivery of the cheque were shown, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operated in favour of the complainant. The accused did not adduce evidence sufficient to rebut those presumptions. The absence of the exact cheque amount in the account statements did not displace the presumption, particularly when the cheque represented the aggregate liability arising from the transactions.

Conclusion: The cheque was issued in discharge of a legal liability and the offence under Section 138 of the Negotiable Instruments Act, 1881 was made out.

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