Rebuttable statutory presumptions in cheque dishonour cases can fail when foundational debt facts are not credibly proved.

In a prosecution under Section 138 of the Negotiable Instruments Act, statutory presumptions under Sections 118 and 139 arise only when cheque execution is admitted, and they remain rebuttable on a preponderance of probabilities. The complainant's failure to give particulars of alleged cash advances, to explain the source of funds, to show corresponding bank withdrawals, and to reconcile omissions in income tax returns weakened the foundational facts. Cross-examination and the defence explanation that the cheques had been given to the bank and later misused were treated as sufficient to displace the presumptions. The acquittal was therefore held justified.

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Issues: Whether the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 was justified on the ground that the complainant failed to establish the foundational facts for invoking the statutory presumptions and the accused rebutted those presumptions.

Analysis: The statutory presumptions under Sections 118 and 139 arise when the execution of the cheque is not disputed, but they remain rebuttable on the standard of preponderance of probabilities. The complainant's case was undermined in cross-examination because he could not give particulars of the alleged cash advances, gave no satisfactory explanation of the source of funds, admitted that the amounts were not reflected in income tax returns, and did not produce bank material showing withdrawals corresponding to the alleged loans. The defence also relied on the complainant's earlier withdrawn complaint and the accused's explanation that the cheques had been given to the bank and were later misused. These circumstances were sufficient to displace the presumption and to show that the foundational facts were not credibly proved.

Conclusion: The acquittal was justified and the accused successfully rebutted the statutory presumptions; the challenge to the acquittal failed.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the statutory presumptions are rebuttable and may be displaced by probable material elicited in cross-examination, especially where the complainant fails to establish the basic facts of the alleged debt or liability.

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