Statutory presumptions in cheque dishonour cases apply on admission of signature unless the drawer proves a probable defence.

Admission of the cheque, signature, and loan transaction triggered the presumptions under Sections 118 and 139 of the Negotiable Instruments Act that the cheque was issued for consideration and in discharge of a legally enforceable debt. Those reverse onus presumptions could be displaced only by a probable defence on a preponderance of probabilities, and a bare plea that the cheque was a blank security cheque was insufficient where the accused led no convincing rebuttal evidence. Dishonour for "account closed" remained within the statutory framework, and service of notice was treated as established on refusal of registered notice. The acquittal was therefore held unsustainable and the conviction under Section 138 was sustained.

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Issues: Whether the acquittal under Section 138 of the Negotiable Instruments Act was liable to be reversed on the facts proved, including the statutory presumptions arising from admitted issuance and signature on the cheque, the existence of a legally enforceable liability, the effect of a security cheque, the dishonour endorsement of account closed, and service of statutory notice.

Analysis: The accused admitted the loan transaction, the cheque, and the signature, which attracted the presumptions under Sections 118 and 139 of the Negotiable Instruments Act that the cheque was issued for consideration and in discharge of debt or liability. Those presumptions operate as reverse onus clauses and can be displaced only by a probable defence proved on a preponderance of probabilities. The defence that the cheque was only a blank security cheque was not established, especially since the accused did not step into the witness box and led no convincing evidence to rebut the complainant's documentary case. The record showed a subsisting liability on the date of the cheque, and a cheque issued as security can still attract Section 138 where the liability has matured. The dishonour memo showing "account closed" also fell within Section 138. The statutory notice was treated as duly served because the registered notice was returned with an endorsement of refusal and the accused did not pay within the statutory period after receipt of summons.

Conclusion: The acquittal was unsustainable and the ingredients of Section 138 stood satisfied; the finding was therefore liable to be reversed and the accused was held guilty.

Final Conclusion: The appeal succeeded, the acquittal was set aside, and the prosecution under Section 138 of the Negotiable Instruments Act resulted in conviction, with sentencing left for further hearing.

Ratio Decidendi: Once the drawer admits the cheque and signature, the court must raise the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, and a mere assertion of security cheque or denial of notice does not rebut them unless the accused establishes a probable defence on a preponderance of probabilities.

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