In Brief
APS Forex Services sued Shakti International Fashion Linkers under Section 138 of the Negotiable Instruments Act for cheques that were dishonoured. The accused admitted issuing the cheques and their signatures on them, but claimed they had paid the amount or the cheques were provided as security. The trial court and High Court acquitted them on grounds that legal liability was not established. The Supreme Court allowed the appeal, holding that once a cheque's issuance and signature are admitted, Section 139 creates a rebuttable presumption that a legally enforceable debt exists. The burden then shifts to the accused to prove by evidence that the entire amount was paid. Since no such evidence was led, the accused were convicted under Section 138 and sentenced to three months imprisonment and fined.
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