Cheque dishonour presumption can be rebutted by a probable defence, shifting back the burden to prove legally enforceable debt.

In a prosecution under the Negotiable Instruments Act, the statutory presumption under Sections 118(a) and 139 arose once the cheque and signature were admitted. The accused rebutted that presumption by raising a probable defence on a preponderance of probabilities, including denial of the loan transaction, challenge to the cheque's source, and material questioning the complainant's financial capacity. Bank records and surrounding circumstances supported the defence that no legally enforceable debt existed. After rebuttal, the burden shifted back to the complainant, who failed to prove the alleged loan by oral or documentary evidence, so the conviction under Section 138 could not be sustained.

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Issues: Whether the accused had rebutted the statutory presumption under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 so as to dislodge the conviction under Section 138 of that Act.

Analysis: The cheque and signature were accepted, so the statutory presumption of a cheque issued towards a debt or liability arose. The accused, however, produced a plausible defence by disputing the loan transaction, explaining the alleged source of the cheque, and showing material to doubt the complainant's financial capacity. The defence evidence included bank records indicating that the complainant did not have substantial funds, along with other circumstances supporting the plea that no legally enforceable debt existed. In such a prosecution, the accused was required only to rebut the presumption on the standard of preponderance of probabilities, not beyond reasonable doubt. Once that burden was discharged, the onus shifted back to the complainant, who failed to prove advancement of the alleged loan by oral or documentary evidence.

Conclusion: The presumption stood rebutted and the conviction under Section 138 of the Negotiable Instruments Act, 1881 could not be sustained.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the accused may rebut the statutory presumption by establishing a probable defence on a preponderance of probabilities, and once rebutted, the complainant must independently prove the existence of a legally enforceable debt or liability.

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