Cheque dishonour presumption prevails where execution is admitted and financial capacity was not specifically challenged in time.

In a cheque dishonour prosecution, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated because the cheque and signature were admitted. The complainant's financial capacity could not be used to displace the presumption when no specific challenge to means was raised in the reply notice or at the relevant stage of trial. The appellate finding that the complainant failed to prove capacity was held unsustainable for want of a proper evidentiary basis, and the defence version of cheque misuse and finance-company involvement remained unsubstantiated. The acquittal was set aside and the conviction and sentence were restored.

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Issues: Whether the acquittal in the cheque dishonour prosecution under Section 138 of the Negotiable Instruments Act was sustainable, particularly on the ground that the complainant had not proved his financial capacity to advance the loan.

Analysis: The cheque and the drawer's signature were not disputed, so the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant. The accused had not specifically questioned the complainant's financial capacity in the reply notice, and the complainant could not be expected to adduce such proof at the end stage of the trial in the absence of a foundational plea. The appellate court's finding on lack of means was therefore held to be unsustainable, especially when the trial court had already appreciated the evidence and convicted the accused. The defence version regarding misuse of cheque leaves and the alleged involvement of a finance company was found unsubstantiated on the record.

Conclusion: The acquittal was set aside, the conviction and sentence under Section 138 of the Negotiable Instruments Act were restored, and the appeal was allowed in favour of the appellant.

Final Conclusion: The complainant succeeded in restoring the trial court's conviction and sentence, and the accused was required to surrender in accordance with the restored conviction.

Ratio Decidendi: Once execution of the cheque is admitted, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act apply, and in the absence of a specific challenge to financial capacity at the relevant stage, an appellate court should not reverse a conviction solely on that ground without proper evidentiary basis.

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