Cheque dishonour presumptions under the Negotiable Instruments Act sustain liability unless the accused rebuts them with cogent evidence.

Proof of a signed cheque and the underlying transaction triggers the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, shifting the burden to the accused to rebut liability with cogent evidence. A voluntarily handed over blank signed cheque does not, by itself, defeat a prosecution under Section 138. Where the dishonour memo reflects insufficiency of funds, that supports the inference that the cheque was duly signed, and a trial court should not reject the complainant's case merely because of a collateral agreement.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 was liable to be interfered with and the accused convicted on the evidence of the cheque transaction and statutory presumptions.

Analysis: The complainant's case was that the accused borrowed money and issued a cheque which was dishonoured for insufficiency of funds. The accused relied on a different transaction and a blank signed cheque. The Court held that once issuance of a signed cheque and the foundational transaction were proved, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 arose in favour of the complainant. It further held that a blank signed cheque, when voluntarily handed over, does not by itself defeat the prosecution, and the burden to rebut the presumption remained on the accused. The dishonour memo showing insufficiency of funds, rather than signature mismatch, supported the conclusion that the cheque was duly signed. The trial court erred in rejecting the complainant's evidence merely on the basis of the collateral agreement.

Conclusion: The acquittal was rightly interfered with, the accused was found guilty under Section 138 of the Negotiable Instruments Act, 1881, and the conviction and sentence were sustained in modified form.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, proof of a signed cheque and the foundational transaction raises the statutory presumptions under Sections 118 and 139, and a voluntary blank signed cheque does not avoid liability unless the accused rebuts the presumption with cogent evidence.

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