Cheque dishonour presumption sustained where cash repayment defence failed to rebut liability under negotiable instruments law.

Delhi HC upheld conviction under Section 138 of the Negotiable Instruments Act because the accused admitted the cash loan, issuance of the cheques, and their dishonour for insufficiency of funds. The defence of cash repayment failed as no cogent evidence, acknowledgment, or explanation for non-recovery of the cheques was produced, so the statutory presumption under Section 139 read with Section 118 of the Indian Evidence Act remained unrebutted. The objection based on the Income-tax Act did not displace liability arising from the admitted cheque transaction, though it may have separate tax consequences.

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Issues: Whether the conviction and sentence under Section 138 of the Negotiable Instruments Act could be interfered with in revision, and whether the defence of cash repayment and the objection based on the cash loan transaction under the Income-tax Act displaced the statutory presumption.

Analysis: The petitioner admitted taking a cash loan, issuing the cheques, and their dishonour for insufficiency of funds. The only defence was alleged repayment in cash, but no cogent evidence, acknowledgment, or explanation for non-recovery of the cheques was produced. The statutory presumption under Section 139 of the Negotiable Instruments Act read with Section 118 of the Indian Evidence Act therefore remained unrebutted. The objection founded on the Income-tax Act did not affect the liability arising from the admitted cheque transaction, though it may have independent tax consequences.

Conclusion: The conviction and sentence under Section 138 of the Negotiable Instruments Act were upheld and the revision was not fit for interference.

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