Cheque presumptions and deemed service of notice sustained liability under dishonour law.

Once execution of a cheque is admitted, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operate in favour of the holder; the drawer must rebut them with probable evidence, and mere assertion that the cheque was a security cheque is insufficient. Here, the accused failed to displace the presumption, so the cheque was treated as issued in discharge of a legally enforceable debt. A notice returned with endorsements such as unclaimed at the correct address attracts deemed service, and the drawer must prove defective service; no such proof was given. The conviction and sentence under Section 138 were sustained.

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Issues: (i) Whether the cheque was issued in discharge of a legally enforceable debt and whether the statutory presumption under the Negotiable Instruments Act stood rebutted; (ii) Whether the requirement of notice under Section 138 was satisfied when the notice was returned as unclaimed.

Issue (i): Whether the cheque was issued in discharge of a legally enforceable debt and whether the statutory presumption under the Negotiable Instruments Act stood rebutted.

Analysis: The accused admitted his signature on the cheque and the bank memo established dishonour for insufficiency of funds. Once execution of the cheque was established, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operated in favour of the complainant. Those presumptions were rebuttable, but the accused failed to produce material to show that the cheque was only a security cheque or that no debt existed. The complainant's evidence was accepted as proving the loan transaction and issuance of the cheque in discharge of liability.

Conclusion: The presumption was not rebutted and the cheque was held to have been issued in discharge of a legally enforceable debt, against the accused.

Issue (ii): Whether the requirement of notice under Section 138 was satisfied when the notice was returned as unclaimed.

Analysis: The notice was sent to the accused's address after dishonour of the cheque and was returned with endorsements such as addressee absent, intimation served, and unclaimed. Such endorsement attracted the principle of deemed service, and the burden shifted to the accused to prove that the address was incorrect or that service was otherwise ineffective. No contrary evidence was adduced. The requirement of notice was therefore treated as complied with.

Conclusion: The notice requirement was satisfied, and the accused's challenge on service failed.

Final Conclusion: The conviction and sentence under Section 138 were sustained, and the revision was found to be without merit.

Ratio Decidendi: Once execution of a cheque is admitted, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act arise in favour of the holder and can be displaced only by probable evidence from the drawer; a notice returned unclaimed at the correct address satisfies the statutory notice requirement unless the drawer proves otherwise.

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