Statutory presumption under cheque law stands unless a probable defence rebuts admitted signature and issuance.

Once issuance of the cheque and the signature were admitted, the statutory presumption under Section 139 of the Negotiable Instruments Act arose that the cheque was issued for a legally enforceable debt. The accused was required to rebut that presumption on a preponderance of probabilities, but the defence version was not supported by reliable material. The alleged memorandum of understanding remained unproved and suspicious, the defence witnesses gave material contradictions, and mere reliance on non-disclosure in income-tax returns did not displace the presumption. On this reasoning, the acquittal was found unsustainable and conviction under Section 138 was warranted.

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Issues: Whether the acquittal for the offence under Section 138 of the Negotiable Instruments Act, 1881 was sustainable in view of the admitted cheque and signature, and whether the defence evidence rebutted the statutory presumption.

Analysis: The accused admitted issuance of the cheque and the signature, which attracted the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued towards discharge of a legally enforceable debt or liability. The complainant's evidence established the transaction, and the defence version that only a smaller amount had been borrowed and fully repaid was not supported by reliable material. The alleged memorandum of understanding was held to be unproved and suspicious, and the evidence of the defence witnesses contained material contradictions. Mere reliance on non-disclosure in income-tax returns did not displace the statutory presumption, especially when the accused's own admissions and the surrounding evidence did not probabilise the defence.

Conclusion: The presumption under Section 139 was not rebutted, the acquittal was unsustainable, and conviction under Section 138 was warranted.

Ratio Decidendi: Once issuance of the cheque and signature are admitted, the statutory presumption of legally enforceable liability arises, and the accused must rebut it by proving a probable defence on a preponderance of probabilities; an unproved and contradictory defence does not suffice.

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