Cheque presumptions under the Negotiable Instruments Act stand unless the drawer rebuts them with a probable defence and supporting evidence.

Where execution of a cheque is admitted, the presumption of liability under sections 118(a) and 139 of the Negotiable Instruments Act applies even if the payee filled in the particulars, and the drawer must rebut it by a probable defence on a preponderance of probabilities. A bare plea that the cheques were only security cheques, without supporting evidence such as complaint of misuse, stop-payment instructions, reply to notice, or proof from alleged creditors, was insufficient, so the defence failed. The complainant's income-tax returns, balance sheets, cash disclosures, funds from family, and jewellery sale proceeds sufficiently proved financial capacity and advancement of the loan, and the conviction and sentence under section 138 were upheld.

---

---

Issues: (i) whether a cheque signed by the drawer but filled by the payee could be treated as a cheque issued in discharge of liability under the Negotiable Instruments Act; (ii) whether the accused had rebutted the statutory presumptions by showing that the cheques were only security cheques and that no legally enforceable debt existed; (iii) whether the complainant had established financial capacity and the advancement of loan so as to sustain conviction under section 138.

Issue (i): whether a cheque signed by the drawer but filled by the payee could be treated as a cheque issued in discharge of liability under the Negotiable Instruments Act

Analysis: The signatures on the cheques were admitted. The mere fact that the complainant filled in the remaining particulars did not invalidate the instrument. A signed blank cheque voluntarily handed over to the payee attracts the statutory presumption if it is otherwise valid, and the drawer remains liable unless he rebuts the presumption by cogent evidence.

Conclusion: The issue was answered against the petitioner.

Issue (ii): whether the accused had rebutted the statutory presumptions by showing that the cheques were only security cheques and that no legally enforceable debt existed

Analysis: Once execution of the cheques was admitted, presumptions under sections 118(a) and 139 arose. The accused was required to establish a probable defence on the touchstone of preponderance of probabilities. The Court found that he did not seek return of the cheques, did not complain about their misuse, did not stop payment after dishonour, received but did not reply to the legal notice, and failed to examine the alleged creditors or produce material showing his own financial capacity. On these facts, the defence that the cheques were only security cheques was not probable.

Conclusion: The issue was answered against the petitioner.

Issue (iii): whether the complainant had established financial capacity and the advancement of loan so as to sustain conviction under section 138

Analysis: The complainant's income-tax returns and balance sheets showed disclosure of loans advanced, cash in hand, funds received from her mother-in-law, and sale proceeds of jewellery. The Court accepted the documentary material as sufficient corroboration of the oral version and found that the complainant had proved advancement of the loan and her financial capacity. The alleged inconsistencies and non-production of some witnesses did not dislodge the prosecution case.

Conclusion: The issue was answered in favour of the respondent.

Final Conclusion: The conviction under section 138 of the Negotiable Instruments Act and the sentence imposed by the trial court were upheld, and the revision petition was dismissed.

Ratio Decidendi: Where execution of a cheque is admitted, the presumption of liability under sections 118(a) and 139 of the Negotiable Instruments Act operates and can be displaced only by a probable defence proved on preponderance of probabilities; a bare plea that the cheque was a security cheque or that the payee filled the particulars is insufficient without supporting evidence.

---