Statutory presumption under cheque dishonour law can be rebutted by credible doubt on debt and lending capacity.

Admission of a cheque signature attracted the Section 139 presumption that it was issued for discharge of a legally enforceable debt, but that presumption remained rebuttable on a preponderance of probabilities. The accused relied on cross-examination and defence evidence to cast doubt on the complainant's claimed lending capacity, the consistency of the loan narrative, and the source of funds. Those materials created a credible doubt about the existence of the alleged debt, shifting the burden back to the complainant to prove the transaction. The presumption was therefore rebutted, the conviction could not stand, and acquittal was restored.

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Issues: Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881 stood rebutted on the material elicited in cross-examination and the defence evidence, so as to displace the conviction under Section 138.

Analysis: Admission of the signature on the cheque attracted the statutory presumption that the cheque was issued for discharge of a debt or liability. That presumption, however, was rebuttable and could be displaced by a probable defence established on a preponderance of probabilities. The accused relied on the complainant's own admissions and the defence exhibits to show that the complainant's asserted financial capacity to advance Rs. 6,00,000/- was doubtful. The complainant had acknowledged prior monetary outlays within a relatively short span, had not consistently stated the date of the alleged loan, and had given no satisfactory explanation of the source of funds. In these circumstances, the defence raised a credible doubt about the existence of a legally enforceable debt and shifted the burden back to the complainant.

Conclusion: The presumption under Section 139 was rebutted, the complainant failed to prove financial capacity to advance the alleged loan, and the conviction could not be sustained.

Final Conclusion: The appellate judgment convicting the accused was set aside and the trial court's acquittal was restored.

Ratio Decidendi: Once the accused raises a probable defence creating doubt about the existence of a legally enforceable debt or the complainant's lending capacity, the statutory presumption under Section 139 stands rebutted and the complainant must then prove the transaction on the evidence.

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