Admitted cheque signatures trigger statutory presumptions under Sections 118 and 139 absent cogent rebuttal.

The complainant alleged that, in February 2009, he advanced a friendly loan of ₹4,50,000 to the petitioner, who issued account-payee Cheque No. 625994 dated 02.06.2009 towards repayment.

The cheque was dishonoured for “insufficient funds” on 05.06.2009. After statutory notices dated 18.06.2009 and 03.07.2009, the petitioner failed to make payment, leading to Complaint Case No. C-1/1885 of 2009 under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”).

The Trial Court convicted the petitioner under Section 138 of the NI Act and sentenced him to six months’ rigorous imprisonment with compensation of ₹4,50,000, with one year’s further rigorous imprisonment in default. The appellate court affirmed the conviction and sentence, giving rise to the present revision.

Whether the petitioner rebutted the statutory presumptions under Sections 118 and 139 of the NI Act after admitting his signature on the cheque and money receipt.

Whether the complainant’s alleged failure to establish financial capacity and the alleged contravention of Section 269SS of the Income Tax Act invalidated the prosecution under Section 138 of the NI Act.

Whether the conviction was vitiated because the succeeding Magistrate allegedly relied upon evidence recorded by a predecessor in violation of Section 326(3) of the Code of Criminal Procedure, 1973.

Whether the concurrent findings of conviction and sentence warranted interference in revisional jurisdiction.

Section 138 of the NI Act creates penal liability where a cheque issued towards a legally enforceable debt or liability is dishonoured and the drawer fails to pay within the statutory period after receipt of notice.

Sections 118 and 139 of the NI Act raise presumptions regarding consideration, the existence of a legally enforceable debt or liability, and the cheque having been issued towards its discharge; these presumptions may be rebutted by cogent and reliable evidence.

Section 326(3) Cr.P.C. restricts a succeeding Magistrate from acting on evidence recorded by a predecessor in a summary trial; however, the restriction was held inapplicable because the case had been conducted as a summons trial and not a summary trial.

Revisional interference is warranted only where the subordinate courts’ findings suffer from perversity, illegality, material impropriety or jurisdictional error.

The petitioner did not dispute his signature on either the cheque or the money receipt. Consequently, the presumptions under Sections 118 and 139 of the NI Act operated in favour of the complainant.

Although the petitioner challenged the complainant’s financial capacity and relied upon Section 269SS of the Income Tax Act, he failed to produce cogent and reliable evidence sufficient to rebut the statutory presumptions.

The challenge based on Section 326(3) Cr.P.C. also failed because the appellate court found, upon examining the record, that the proceedings were conducted as a summons trial rather than a summary trial.

The High Court therefore found that both subordinate courts had properly appreciated the evidence and that their concurrent findings were neither perverse nor legally infirm.

The petitioner’s bail bond was cancelled, and he was directed to surrender before the Trial Court within two months to serve the remaining sentence; failing surrender, the Trial Court was directed to take coercive steps for his arrest and detention.

Pending interlocutory applications, if any, were disposed of, and the Trial Court record was directed to be returned.