Cheque dishonour presumptions apply once signatures are admitted, and disputed factual defences cannot defeat quashing stage proceedings.

In a Section 138 NI Act prosecution, a complaint disclosing cheque issuance, dishonour, statutory notice and non-payment could not be quashed under Section 482 CrPC merely because the accused raised disputed factual defences based on underlying land transactions and cancellation agreements. Those matters required evidence and could be examined at trial. Once the cheque signatures were admitted, the presumptions under Sections 118 and 139 operated in favour of the complainant that the cheques were issued for consideration and towards a legally enforceable debt or liability. Mere denial of liability was insufficient to rebut those presumptions at the quashing stage, so the defence had to be established before the trial court.

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Issues: (i) Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed in proceedings under Section 482 of the Code of Criminal Procedure, 1973 on the ground that disputed questions of fact arise from the underlying land transactions and cancellation agreements. (ii) Whether admission of signatures on the cheques attracted the statutory presumption of a legally enforceable debt or liability under Sections 118 and 139 of the Negotiable Instruments Act, 1881.

Issue (i): Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed in proceedings under Section 482 of the Code of Criminal Procedure, 1973 on the ground that disputed questions of fact arise from the underlying land transactions and cancellation agreements.

Analysis: The complaint disclosed issuance of cheques, dishonour, statutory notice, and non-payment within the prescribed time. The challenge raised a factual defence based on the legality and enforceability of the underlying agreements and the circumstances in which the cheques were issued. Such defences required evidence and could not be finally adjudicated in proceedings for quashing. At the stage of Section 482 jurisdiction, the Court does not undertake minute appreciation of evidence where the ingredients of the offence are prima facie made out.

Conclusion: The complaint was not liable to be quashed on this ground.

Issue (ii): Whether admission of signatures on the cheques attracted the statutory presumption of a legally enforceable debt or liability under Sections 118 and 139 of the Negotiable Instruments Act, 1881.

Analysis: Once the signatures on the cheques were not disputed, the statutory presumptions under Sections 118 and 139 operated in favour of the complainant that the cheques were issued for consideration and in discharge of a debt or liability. The presumptions were rebuttable, but the burden to displace them lay on the accused by leading evidence at trial. Mere denial of liability was insufficient to negate the presumption at the quashing stage.

Conclusion: The presumption under Sections 118 and 139 applied, and the defence could be examined only at trial.

Final Conclusion: The petitions failed because the proceedings under Section 138 of the Negotiable Instruments Act, 1881 disclosed a prima facie case and the petitioners were left to establish their defence before the trial court.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once execution of the cheque is admitted, the statutory presumption of debt or liability arises and cannot be displaced in a quashing proceeding merely by raising disputed factual defences requiring evidence.

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