### Failure to Rebut Statutory Presumptions via Probable Defence Sustains Conviction Under Section 138 NI Act

The applicant (original accused) was convicted under Section 138 of the Negotiable Instruments (NI) Act for the dishonor of a cheque worth Rs. 7 lakhs dated May 5, 2015

The complainant alleged the cheque was issued to repay a business loan, but it was returned due to "funds insufficient"

The Trial Court sentenced the applicant to two months of simple imprisonment and ordered compensation equal to the cheque amount

The Sessions Court upheld this conviction on April 25, 2019

The applicant moved the High Court in revision, contending that the cheque was actually given as security to a third party (Subhashbhai) during a failed land deal where the complainant was a witness, and that the complainant lacked the financial capacity to lend Rs. 7 lakhs

During the pendency of this revision, the applicant failed to deposit 50% of the cheque amount as directed for bail and subsequently completed his entire prison sentence

1. Whether the applicant-accused successfully raised a "probable defence" regarding the misuse of the cheque as security to rebut the statutory presumptions under the NI Act

2. Whether the complainant lacked the financial capacity to advance the loan amount of Rs. 7 lakhs

The court applied Section 138 of the NI Act regarding the dishonor of cheques for insufficiency of funds

It relied on the special rules of evidence under Section 118 (presumption of consideration) and Section 139 (presumption in favour of holder) of the NI Act

The court applied the "preponderance of probabilities" standard for the rebuttal of presumptions by the accused, as established in Basalingappa v. Mudibasappa and Rohitbhai Jivanlal Patel v. State of Gujarat

It also considered the scope of revisional jurisdiction under Sections 397 and 401 of the CrPC, which limits interference to cases of patent illegality or jurisdictional error

The High Court observed that since the applicant did not dispute his signature on the cheque or the fact that it was drawn on his account, the legal presumptions under Sections 118 and 139 were mandatory

The Court found the applicant’s "security cheque" theory weak because the land agreement (Exh. 57) made no mention of the cheque being handed over as security

Furthermore, the applicant failed to examine the star witness, Subhashbhai, to whom the cheque was allegedly given

The Court noted that a "prudent man" whose cheque was misused would have issued a "stop payment" instruction or filed a police complaint, neither of which the applicant did

Regarding financial capacity, the Court held that the complainant’s family landholdings (35 vighas), his factory ownership, and the bank statement (Exh. 45) sufficiently proved his means, especially since the applicant admitted in cross-examination that the complainant was "well-settled"

It held that the applicant failed to rebut the statutory presumptions with any probable defence

Since the applicant had already served his substantive sentence, the Court directed him to deposit the cheque amount as compensation under Section 357 CrPC within eight weeks, failing which the complainant may pursue further legal remedies