Cheque dishonour presumptions under the Negotiable Instruments Act restore conviction when no probable defence rebuts foundational facts.

Once the foundational facts of cheque issuance, dishonour, and demand notice are proved, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder, and the dishonour memo also attracts the presumption under Section 146. The accused must rebut those presumptions on a preponderance of probabilities; mere denial is insufficient. The lower appellate court erred in treating the presumptions as unavailable despite proof of the basic facts, so the acquittal was set aside and the conviction under Section 138 was restored, with the sentence modified to a fine and default imprisonment.

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Issues: Whether the acquittal recorded by the lower appellate court was unsustainable in view of the statutory presumptions under the Negotiable Instruments Act, 1881 and the evidence of cheque dishonour, demand notice, and non-payment.

Analysis: The cheque, its dishonour memo, and the demand notice established the foundational facts for applying the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881. The dishonour memo attracted the presumption under Section 146 of the Negotiable Instruments Act, 1881. The accused did not adduce evidence sufficient to rebut the presumption on the standard of preponderance of probabilities. The lower appellate court erred in treating the presumptions as unavailable despite proof of the basic factual basis and in upsetting the conviction on an erroneous appreciation of the burden of proof.

Conclusion: The acquittal was set aside and the conviction under Section 138 of the Negotiable Instruments Act, 1881 was restored, with sentence modified to fine of Rs. 3,00,000/- in default simple imprisonment for one year.

Ratio Decidendi: Once the foundational facts of issuance, dishonour, and notice are established, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operate in favour of the holder of the cheque and can be displaced only by a probable defence proved on a preponderance of probabilities.

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