Rebuttable cheque presumption under the Negotiable Instruments Act failed where no legally recoverable debt was proved.

Under Section 138 of the Negotiable Instruments Act, a conviction requires proof that the cheque was issued in discharge of a legally enforceable debt, and the Section 139 presumption is rebuttable. The complainant failed to support the alleged loan with income-tax returns or books of account, did not state when the loan was advanced, and produced a cheque appearing to be filled in with different inks. Those circumstances made the security-cheque defence plausible and created doubt about the prosecution case, so leave to appeal was rightly refused and the acquittal was upheld.

---

---

Issues: Whether leave to appeal should be granted against an acquittal under Section 138 of the Negotiable Instruments Act, 1881, where the complainant failed to establish that the cheque was issued in discharge of a legally recoverable debt and the statutory presumption stood rebutted.

Analysis: The presumption under Section 139 of the Negotiable Instruments Act, 1881 is rebuttable. To sustain a conviction under Section 138, the complainant must show that the cheque was issued towards a legally enforceable liability. The complainant did not disclose the alleged loan in the income-tax return or books of account, did not state when the loan was advanced, and produced a cheque appearing to be filled in with different inks. These circumstances made the defence that the cheques were issued as security plausible and created doubt about the prosecution version.

Conclusion: Leave to appeal was rightly refused and the acquittal was upheld.

---