Cheque dishonour prosecution fails after part payment reduces liability and rebuts the Section 139 presumption.

Where a payee receives part payment after dishonour of a cheque, the statutory presumption under Section 139 of the Negotiable Instruments Act can be rebutted if the reduced liability is proved. On these facts, the payee could not insist on the full cheque amount without a fresh or adjusted cheque, so prosecution under Section 138 was not maintainable. The ingredients of cheating under Section 420 IPC were also absent because no further liability beyond the admitted payment was shown. The concurrent convictions were set aside and the accused was acquitted.

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Issues: Whether, after the complainant received part payment towards the liability covered by the cheque, prosecution under Section 138 of the Negotiable Instruments Act, 1881 remained maintainable, and whether the conviction under Section 420 of the Indian Penal Code, 1860 could stand.

Analysis: Section 139 of the Negotiable Instruments Act, 1881 creates a presumption of law that the holder of a cheque received it towards discharge, in whole or in part, of a debt or liability. Such a presumption is obligatory and can be rebutted only by proof that the asserted liability did not exist to the extent reflected in the cheque. The Court held that once the complainant, after dishonour of the cheque, received part payment from the accused, the complainant could not continue to demand the full cheque amount without issuing a fresh cheque or otherwise confining the demand to the reduced liability. On the evidence, the complainant himself admitted receipt of the later cheque amount, and no further liability beyond that amount was shown to have arisen. The ingredients of cheating were also absent.

Conclusion: The presumption under Section 139 stood rebutted on the facts, prosecution under Section 138 was impermissible after receipt of part payment, and the conviction under Section 420 could not be sustained.

Final Conclusion: The revision succeeded, the concurrent convictions were set aside, and the accused was acquitted.

Ratio Decidendi: Where, after dishonour of a cheque, the payee receives part payment reducing the drawer's liability below the cheque amount, the payee cannot prosecute on the basis of the original cheque for the full amount unless the cheque is suitably adjusted or replaced, and the statutory presumption under Section 139 of the Negotiable Instruments Act stands rebutted when the reduced liability is proved.

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