Cheque dishonour liability survives frozen accounts, security-cheque pleas, and disputed notice when presumptions remain unrebutted.

Dishonour of cheques remained actionable under Section 138 despite the drawer's account being frozen or seized, because the account evidence showed insufficient or negligible funds and a frozen account does not, by itself, defeat liability. On admission of execution and signatures, the presumptions under Sections 118 and 139 operated for the complainant, and the accused failed to raise a probable defence that the cheques were only security instruments or that no legally enforceable debt existed. Notice sent by registered post to the correct address attracted the presumption of service, and alleged custody did not excuse non-payment after summons. The conviction and sentence, as modified in appeal, were upheld.

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Issues: (i) Whether dishonour of the cheques attracted Section 138 of the Negotiable Instruments Act, 1881 where the drawer's bank account had been frozen or seized before presentation and the return memo recorded funds insufficient or stop-payment remarks. (ii) Whether the accused had rebutted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 by pleading that the cheques were security cheques and that no legally enforceable liability existed. (iii) Whether alleged non-service of statutory notice and the accused's custody in another case negatived liability under Section 138 of the Negotiable Instruments Act, 1881.

Issue (i): Whether dishonour of the cheques attracted Section 138 of the Negotiable Instruments Act, 1881 where the drawer's bank account had been frozen or seized before presentation and the return memo recorded funds insufficient or stop-payment remarks.

Analysis: The account statements and bank evidence showed that the accused's account had either no sufficient balance or negligible balance at the relevant times, including when the account was seized. The Court held that dishonour for reasons such as insufficient funds, stop payment, or account being frozen does not, by itself, take the case outside Section 138. The cited precedents on closed accounts and stop-payment instructions supported the proposition that the offence remains attracted where the drawer lacks sufficient funds or control over payment, unless a probable defence is established.

Conclusion: The cheques' dishonour remained within the ambit of Section 138 of the Negotiable Instruments Act, 1881, and the plea based on freezing of the account failed.

Issue (ii): Whether the accused had rebutted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 by pleading that the cheques were security cheques and that no legally enforceable liability existed.

Analysis: Once execution and signature on the cheques were admitted, the presumptions under Sections 118 and 139 arose in favour of the complainant. The accused led no credible material to show that the cheques were not issued in discharge of liability or that the security-cheque plea was probable. The Court reiterated that the burden on the accused is only to raise a probable defence on a preponderance of probabilities, which was not done here.

Conclusion: The statutory presumptions were not rebutted and the defence of security cheque failed.

Issue (iii): Whether alleged non-service of statutory notice and the accused's custody in another case negatived liability under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The notice was sent to the correct address by registered post, attracting the presumption of service. Even assuming that the accused was in custody and did not actually receive the notice, he did not make payment within fifteen days of summons or take steps to tender the cheque amount. The Court held that the plea of non-service did not exonerate him in the facts of the case.

Conclusion: The plea of non-service of notice and custody did not defeat the prosecution under Section 138 of the Negotiable Instruments Act, 1881.

Final Conclusion: The conviction and sentence, as modified by the appellate court, were upheld and all the revision petitions were rejected.

Ratio Decidendi: Where execution of a cheque is admitted, presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 arise, and dishonour for insufficiency of funds, stop-payment, or a frozen account will still attract Section 138 unless the accused rebuts the presumption by a probable defence on a preponderance of probabilities.

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