Cheque security defence rebuts Section 138 presumption, and acquittal is upheld for lack of enforceable debt.

In a prosecution under Section 138 of the Negotiable Instruments Act, the court found that the cheque was not proved to have been issued in discharge of a legally enforceable debt. The accused consistently maintained that the cheque leaves were given only as security, and the surrounding circumstances, including the admitted liability in a different amount and the timing of the notice and cheque presentation, rebutted the statutory presumption on a balance of probabilities. As the complainant failed to establish the offence beyond reasonable doubt, interference with the acquittal was refused and the acquittal was upheld.

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Issues: Whether the complainant had proved the ingredients of the offence under Section 138 of the Negotiable Instruments Act, 1881 so as to warrant interference with the acquittal.

Analysis: The cheque was found to have been issued in the context of the loan transaction, but the accused consistently disputed that it was issued towards a legally enforceable liability and asserted that cheque leaves were handed over only as security. The surrounding circumstances, including the accused's admitted liability in a different amount and the timing of the notice and presentation of the cheque, were held to show that the cheque was not issued in discharge of a legally enforceable debt. The statutory presumption was treated as rebutted on the basis of probabilities, and the complainant was found not to have established the case beyond reasonable doubt.

Conclusion: The acquittal was upheld and interference was refused.

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