Cheque dishonour presumptions are rebuttable; probable defence and lack of proved debt justified sustaining acquittal.

A complaint under Section 138 of the Negotiable Instruments Act was not barred for want of a money-lending licence because an advance founded on a negotiable instrument is excluded from the Bombay Money Lenders Act definition of loan, so the licence-based dismissal provision did not apply. On the dishonour charge, the statutory presumptions under Sections 118 and 139 were rebuttable; the accused produced material showing the cheque and vouchers were earlier given as security, and the complainant's evidence contained inconsistencies on the loan transaction and payment details. On the totality of the evidence, a probable defence was made out and the complainant did not prove a legally enforceable debt, so interference with the acquittal was unwarranted.

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Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 was liable to be dismissed for want of a money-lending licence in view of the Bombay Money Lenders Act, 1946. (ii) Whether the acquittal of the accused for the cheque dishonour offence called for interference in appeal, having regard to the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 and the evidence on record.

Issue (i): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 was liable to be dismissed for want of a money-lending licence in view of the Bombay Money Lenders Act, 1946.

Analysis: The transaction in question was based on a cheque, which is a negotiable instrument. The Bombay Money Lenders Act, 1946 excludes an advance made on the basis of a negotiable instrument from the definition of loan. The mandatory dismissal provision for want of licence under Section 10(4) of that Act therefore did not govern such a complaint under Section 138 of the Negotiable Instruments Act, 1881.

Conclusion: The complaint was not barred merely because the complainant did not produce a money-lending licence.

Issue (ii): Whether the acquittal of the accused for the cheque dishonour offence called for interference in appeal, having regard to the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 and the evidence on record.

Analysis: The presumption arising from issuance and signature on the cheque was rebuttable. The accused brought on record material showing that signed blank cheques and vouchers were already with the complainant as security in respect of earlier transactions and had been returned on settlement. The complainant's evidence contained material inconsistencies regarding the amount advanced, the mode of payment, the identity of the person to whom payment was allegedly made, and the availability of funds or supporting accounts. On the totality of the evidence, the accused raised a probable defence and the complainant failed to prove a legally enforceable debt beyond doubt.

Conclusion: The acquittal did not suffer from perversity warranting interference.

Final Conclusion: The conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881 was not established, and the order of acquittal remained undisturbed.

Ratio Decidendi: In a cheque dishonour prosecution, the statutory presumption is rebuttable on a preponderance of probabilities; once the accused produces credible material creating a probable defence, the burden shifts back to the complainant to prove a legally enforceable debt, and an acquittal based on such appraisal will not be interfered with unless perversity is shown.

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