Section 138 cheque presumption under the Negotiable Instruments Act was not effectively rebutted by the defence evidence.

A Karnataka HC analysis on Section 138 of the Negotiable Instruments Act notes that admission of the cheque signature, proof of dishonour, and service of notice triggered the statutory presumption under Section 139. The accused tried to rebut it by alleging a different loan transaction, repayment, and misuse of the cheque, but the defence evidence was found doubtful and unsupported. The note further states that the appellate court did not adequately appreciate the record and relied mainly on one witness, so the presumption was not effectively displaced.

---

---

Issues: Whether the appellate court erred in acquitting the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The cheque signature was admitted, the dishonour was proved, and notice was served. The accused attempted to rebut the statutory presumption by asserting a different loan transaction with the complainant's brother and by relying on oral and documentary material, but the defence evidence did not inspire confidence. The accused failed to substantiate the alleged repayment or the alleged misuse of the cheque, and the documents produced in support of the defence were found doubtful. The trial court's reasoning on the presumption under Section 139 of the Negotiable Instruments Act, 1881 was not effectively displaced by the appellate court, which had relied mainly on one witness's evidence and did not adequately appreciate the record.

Conclusion: The acquittal was held to be erroneous, and the complainant's appeal succeeded.

---