Cheque dishonour presumption under Section 139 shifts the burden once signature and dishonour are proved.

In a cheque dishonour prosecution, the High Court emphasised that once the cheque, signature, dishonour for insufficiency of funds, timely notice, and non-payment after notice were established, the statutory presumption under Section 139 of the Negotiable Instruments Act operated in favour of the complainant. The accused's bare plea that blank signed cheques were misused, without supporting evidence, was insufficient to rebut the reverse onus. The Court also held that the complainant was not required to prove the source of funds or other collateral matters once the foundational facts under Section 138 were proved, and that omissions regarding ancillary documents or interest particulars were not fatal. The acquittal was therefore set aside and conviction under Section 138 followed.

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Issues: Whether the acquittal in a cheque dishonour prosecution was liable to be set aside and the accused convicted under Section 138 of the Negotiable Instruments Act on the basis of the admitted signature on the cheque and the statutory presumption under Section 139.

Analysis: The foundational requirements of Section 138 were found to be established: issuance of the cheque, its dishonour for insufficiency of funds, issuance of notice within the prescribed time, and failure to pay after notice. Once the accused admitted the signature on the cheque and alleged misuse of blank signed cheques without leading any evidence to support that defence, the presumption under Section 139 operated in favour of the complainant. The Court held that Section 139 creates a reverse onus clause and that the complainant was not required to prove the source of funds or other collateral matters once the cheque and dishonour were proved. The trial court had erred in treating omissions regarding ancillary documents and interest particulars as fatal to the prosecution case.

Conclusion: The acquittal was set aside and the respondent was held guilty under Section 138 of the Negotiable Instruments Act.

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