Statutory presumption on admitted cheque issuance requires cogent rebuttal; security-cheque pleas and missing documents may not suffice.

Where issuance of cheques is admitted, presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder, and the drawer must rebut them with cogent evidence of no liability or discharge. A defence that the cheques were only security instruments will not suffice unless supported by the record; alteration and countersignature on cheque dates, together with failure to demand return after notice, may support liability. Non-production of a memorandum of understanding or related documents does not, by itself, defeat the presumption or warrant adverse inference where the defence does not specifically show that those documents negate liability.

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Issues: (i) Whether the accused rebutted the statutory presumption arising from the admitted issuance of the cheques. (ii) Whether adverse inference had to be drawn against the complainant for non-production of the memorandum of understanding and other documents.

Issue (i): Whether the accused rebutted the statutory presumption arising from the admitted issuance of the cheques.

Analysis: Once issuance of the cheques was admitted, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant. The defence that the cheques were issued only as security and that the liability had been discharged had to be established by cogent evidence. The record showed that the dates on some cheques had been altered and countersigned by the accused, which belied the plea that the cheques were blank security instruments. The conduct of the accused in not demanding return of the cheques after notice also supported the existence of liability. The lower appellate court erred in allowing the appeals without properly examining whether the presumption had been rebutted.

Conclusion: The accused did not rebut the presumption, and the finding was in favour of the complainant.

Issue (ii): Whether adverse inference had to be drawn against the complainant for non-production of the memorandum of understanding and other documents.

Analysis: The memorandum of understanding was referred to in the notice and complaint, but its non-production did not change the result once the accused failed to rebut the statutory presumption. The accused did not set up a specific defence that the memorandum negated liability, and the failure to produce documents under Section 91 of the Code of Criminal Procedure, 1973 did not, on these facts, displace the complainant's case. Any adverse inference was insufficient to outweigh the statutory presumption and the evidence of issuance of cheques.

Conclusion: No adverse inference sufficient to defeat the complainant's case was warranted, and the issue was decided in favour of the complainant.

Final Conclusion: The appellate court's acquittal-type relief was set aside and the trial court's conviction and sentence were restored, resulting in the complainant succeeding on the merits.

Ratio Decidendi: Where issuance of a cheque is admitted, the drawer must rebut the statutory presumption by cogent evidence showing non-existence of liability or discharge thereof; a mere plea of security cheque or non-production of collateral documents is insufficient unless it probabilizes the defence on the record.

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