Rebuttable cheque presumption under Section 139 covers legally enforceable debt, requiring only a probable defence

Section 139 of the Negotiable Instruments Act creates a mandatory reverse-onus presumption in favour of the cheque holder, and that presumption extends to the existence of a legally enforceable debt or liability. It remains rebuttable, with the accused required only to raise a probable defence on a preponderance of probabilities, not prove innocence beyond reasonable doubt. The discussion also notes that admitted signatures and transactions, without credible supporting material, are insufficient to rebut the presumption, and that a claimed defect in cognizance under the Code of Criminal Procedure will not vitiate the complaint where the record shows cognizance was in fact taken.

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Issues: (i) Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881 extends to the existence of a legally enforceable debt or liability and remains rebuttable. (ii) Whether the accused succeeded in rebutting the statutory presumption and whether the complaint suffered from any fatal procedural defect relating to cognizance under the Code of Criminal Procedure, 1973.

Issue (i): Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881 extends to the existence of a legally enforceable debt or liability and remains rebuttable.

Analysis: Section 139 was held to create a mandatory reverse-onus presumption in favour of the holder of the cheque. The earlier view restricting the presumption only to a debt or liability was not accepted as controlling, and the later authoritative view recognised that the presumption includes the existence of a legally enforceable debt or liability. The presumption is not conclusive; it operates until displaced by a probable defence, and the accused is not required to prove innocence beyond reasonable doubt.

Conclusion: The presumption under Section 139 includes legally enforceable debt or liability and is rebuttable on a preponderance of probabilities.

Issue (ii): Whether the accused succeeded in rebutting the statutory presumption and whether the complaint suffered from any fatal procedural defect relating to cognizance under the Code of Criminal Procedure, 1973.

Analysis: The accused admitted the transactions, the signatures on the promissory note and cheques, and did not produce credible material to support the plea of forcible signing or the absence of liability. The defence was found neither probable nor plausible, and the statutory notice was also left unanswered. On procedure, the record showed that cognizance had in fact been taken earlier, and the later view that cognizance was absent was held to be perverse and contrary to the record.

Conclusion: The accused failed to rebut the presumption, and no fatal procedural defect vitiated the complaint.

Final Conclusion: The conviction under Section 138 was restored, the impugned order was set aside, and the appeals succeeded.

Ratio Decidendi: In a cheque dishonour prosecution, Section 139 of the Negotiable Instruments Act, 1881 raises a rebuttable presumption of a legally enforceable debt or liability, which can be displaced only by a probable defence established on a preponderance of probabilities.

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