Statutory presumption under cheque law survives mere denial; conviction restored when security-cheque defence lacked credible proof.

Once execution of the cheque is proved, the Section 139 presumption of liability operates in favour of the complainant, and the accused must rebut it with credible evidence. A cheque issued towards an admitted business liability was dishonoured, notice was served, and no timely payment followed; the defence that it was only a security cheque was rejected for lack of supporting material, particularly in light of bank evidence and business documents. Mere denial or a probable explanation was insufficient to displace the statutory presumption. The acquittal was set aside and the conviction and compensation under Section 138 of the Negotiable Instruments Act were restored.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act was unsustainable in view of the statutory presumption arising from the cheque and the accused's failure to rebut it.

Analysis: The cheque issued towards an admitted business liability was returned unpaid. The notice demanding payment was served, but no timely reply or payment was made. The Court held that the cheque transaction attracted the presumption under Section 139 of the Negotiable Instruments Act and that the burden shifted to the accused to rebut it by credible evidence. The defence that the cheque was given only as security was rejected for want of supporting material, especially in view of the bank evidence and the surrounding documents showing business dealings and supply of materials. Mere denial and a suggested probable defence were found insufficient to displace the statutory presumption.

Conclusion: The acquittal was set aside, the conviction for the offence under Section 138 of the Negotiable Instruments Act was restored, and the award of compensation was also restored.

Final Conclusion: The complainant succeeded in establishing the cheque liability, and the accused failed to rebut the presumption, resulting in restoration of the conviction and sentence.

Ratio Decidendi: Once execution of the cheque is proved, the statutory presumption of liability must be rebutted by credible evidence, and a mere plausible explanation or unsubstantiated denial is not enough.

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