Cheque dishonour presumption rebutted where complainant failed to prove financial capacity and legally recoverable debt.

The court discussed prosecution under Section 138 of the Negotiable Instruments Act, 1881 and the rebuttable presumption under Section 139 arising from admitted cheque execution and signature. It held that the complainant had to establish a legally recoverable debt, and that the presumption could be displaced on a preponderance of probabilities. On the evidence, the alleged cash loan was not supported by material showing financial capacity or the stated source of funds, and cross-examination created serious doubt about the transaction. The presumption was treated as rebutted, the debt was not proved beyond reasonable doubt, and the acquittal was left undisturbed.

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Issues: Whether the complainant established the ingredients of the offence under Section 138 of the Negotiable Instruments Act, 1881 and whether the acquittal called for interference.

Analysis: The cheque and signature were admitted, so the presumption under Section 139 of the Negotiable Instruments Act, 1881 arose in favour of the complainant. That presumption was, however, rebuttable and could be displaced on a preponderance of probabilities. On the evidence, the complainant's claim of advancing a large cash loan was not supported by any material showing ownership or sale of land, the alleged source of funds, and his own cross-examination showed limited income. The guarantor document relied on did not establish a capacity to advance cash as a private lender. The accused, through cross-examination, created a serious doubt about the complainant's financial capacity and the existence of a legally recoverable debt.

Conclusion: The presumption stood rebutted and the complainant failed to prove the transaction beyond reasonable doubt; the acquittal was justified and the appeal was dismissed.

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