Section 138 cheque dishonour presumption was rebutted where records were inconsistent and liability was not proved.

In a prosecution under Section 138 of the Negotiable Instruments Act, the complainant must prove that the cheque was issued towards a legally enforceable debt or liability. Although issuance of the cheque and its dishonour were not disputed, the complainant's evidence was internally inconsistent on the underlying transaction, pleaded invoices were not produced, no statement of accounts was filed, and witness admissions weakened the claim. On those materials, the statutory presumption under Section 139 was rebutted on a preponderance of probabilities, and the complainant failed to prove the case beyond reasonable doubt. The High Court therefore upheld the acquittal and declined interference.

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Issues: Whether the acquittal recorded by the Trial Court for the offence under Section 138 of the Negotiable Instruments Act, 1881 required interference in appeal.

Analysis: The complainant was required to establish that the cheque was issued towards a legally enforceable debt or liability. Although the cheque and dishonour were not in dispute, the evidence led for the complainant was found internally inconsistent on the nature and quantum of the underlying transaction, the supporting invoices were not produced as pleaded, and no statement of accounts was placed on record to show the subsisting liability. The witness evidence also contained admissions which weakened the complainant's version. In these circumstances, the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 stood rebutted on the touchstone of preponderance of probabilities, and the complainant failed to prove the case beyond reasonable doubt.

Conclusion: The acquittal was upheld and the challenge to the Trial Court's finding was rejected.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the accused raises a probable defence from the materials on record and the complainant's evidence is inconsistent or unsupported by the basic transactional records, the presumption under Section 139 stands rebutted and acquittal need not be disturbed.

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