Statutory presumption under cheque law stood unrebutted where the security-cheque defence was not proved.

Admitted cheque and signature triggered the statutory presumption under the Negotiable Instruments Act, and the drawer failed to rebut it. A defence that the cheque was issued as security in a chit transaction with a third person was not probabilised because the crucial supporting witness was available but not examined. The complainant was not required to disprove that version once a specific defence was raised. The lower appellate court erred in treating that non-examination as fatal and in interfering with a conviction that had been correctly based on the evidence. The cheque was therefore treated as issued towards a legally enforceable liability, and the conviction under Section 138 was restored.

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Issues: Whether the respondent rebutted the statutory presumption arising from the admitted cheque and signature under the Negotiable Instruments Act, and whether the lower appellate court was justified in setting aside the conviction under Section 138.

Analysis: The cheque and signature were admitted. The defence was that the cheque had been handed over as a security cheque in a chit transaction with another person and was later misused. The Court held that the entire defence rested on the testimony of that person, who was said to be available but was not examined. Once the respondent set up a specific defence based on that transaction, the burden lay on the respondent to substantiate it. The Court found that the respondent failed to probabilize the defence, while the trial court had appreciated the evidence correctly. The lower appellate court erred in treating non-examination of the said person by the complainant as fatal and in upsetting the conviction.

Conclusion: The statutory presumption remained unrebutted, the cheque was held to have been issued towards a legally enforceable liability, and the acquittal by the lower appellate court was unsustainable.

Final Conclusion: The conviction under Section 138 was restored and the criminal appeal was allowed.

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