Negotiable Instruments Act presumption of debt can be rebutted on probabilities, defeating conviction where loan proof is doubtful.

In a prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumption of a legally enforceable debt may be rebutted by the accused on a preponderance of probabilities, not beyond reasonable doubt. The court examined the cheque, agreement, promissory note and affidavit together, but found surrounding circumstances that cast doubt on the alleged loan transaction, including the agreement's character as an arrangement for future payment and the absence of any loan entry in the complainant's income tax return. On that material, the presumption under Sections 118 and 139 stood rebutted, and conviction could not be sustained without affirmative proof of liability.

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Issues: Whether the complainant had proved the existence of a legally enforceable debt and whether the statutory presumptions under the Negotiable Instruments Act stood rebutted so as to sustain the conviction under Section 138.

Analysis: The cheque, agreement, promissory note and affidavit were examined together, but the surrounding circumstances created doubt about the alleged loan transaction. The agreement was found to be only an arrangement for a future payment and not proof of actual disbursement on the stated date. The absence of the loan entry in the complainant's income tax return supported an adverse inference. Applying the reverse onus framework under Sections 118 and 139 of the Negotiable Instruments Act, the accused was required only to raise a probable defence on a preponderance of probabilities, not prove his defence beyond doubt. On the material before it, the presumption of legally enforceable debt stood rebutted. The discussion on maintainability of the revision against acquittal under Sections 378(4) and 401 of the Code of Criminal Procedure did not alter the substantive finding on liability.

Conclusion: The conviction could not be sustained, as the presumption under Section 139 of the Negotiable Instruments Act was rebutted and the complainant failed to establish a legally enforceable debt.

Final Conclusion: The acquittal was upheld and the petition failed.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, the accused may rebut the statutory presumption by showing, on a preponderance of probabilities, that a legally enforceable debt did not exist; if that presumption is rebutted, conviction cannot stand without affirmative proof of liability.

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