Cheque dishonour presumption under the Negotiable Instruments Act stands unless rebutted by a probable defence on probabilities.

Once cheque issuance was admitted, presumptions under Sections 118 and 139 of the Negotiable Instruments Act arose in favour of the complainant. The accused had to rebut them by a probable defence on a preponderance of probabilities, but mere denial and unsupported assertions were insufficient. The claim that the cheque was issued only as security also failed because no loan agreement, receipt, or reliable supporting record was produced, and the surrounding correspondence did not show absence of liability. The Court therefore held that the statutory presumptions were not displaced and sustained the conviction under Section 138, with the revisional challenge failing.

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Issues: (i) Whether the cheque in question was issued only as security and not in discharge of a legally enforceable debt or liability. (ii) Whether the accused successfully rebutted the statutory presumption arising under the Negotiable Instruments Act.

Issue (i): Whether the cheque in question was issued only as security and not in discharge of a legally enforceable debt or liability.

Analysis: The petitioner did not produce any loan agreement, receipt, or other reliable document to show that the cheque was handed over merely as security. The correspondence relied upon by the petitioner did not establish that the cheque lacked consideration, and no convincing steps were taken to call for records or otherwise substantiate the claim of security issuance. The Court also found it improbable that a high-value cheque would be issued without any supporting document or purpose.

Conclusion: The cheque was not proved to have been issued merely as security, and the plea of absence of liability failed.

Issue (ii): Whether the accused successfully rebutted the statutory presumption arising under the Negotiable Instruments Act.

Analysis: Since issuance of the cheque was admitted, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act arose in favour of the complainant. The accused was required to rebut those presumptions by raising a probable defence on the basis of materials on record and by showing non-existence of debt on a preponderance of probabilities. The Court held that the petitioner's materials did not probabilise non-delivery of the vehicle or non-existence of liability, and bare denial was insufficient to displace the presumption.

Conclusion: The statutory presumptions were not rebutted, and the conviction under Section 138 of the Negotiable Instruments Act was upheld.

Final Conclusion: The revisional challenge failed, and the conviction and sentence were sustained.

Ratio Decidendi: In a cheque dishonour prosecution, once issuance of the cheque is admitted, the presumption of legally enforceable debt arises, and it can be displaced only by a probable defence proved on the preponderance of probabilities; mere denial or unsupported assertion is insufficient.

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