Statutory presumption rebutted in cheque dishonour case, as complainant failed to prove a legally enforceable debt and financial capacity.

The accused rebutted the statutory presumption under the Negotiable Instruments Act by raising a probable defence supported by defence evidence and surrounding circumstances. The complaint lacked a clear date of the alleged hand loan, and the claim of a substantial cash advance without security, interest, or proof of financial capacity was not substantiated. Cross-examination, pending civil litigation, and the absence of documentary evidence of income or source of funds weakened the alleged debt. Once the presumption stood rebutted on a preponderance of probabilities, the burden returned to the complainant, who failed to prove a legally enforceable debt beyond reasonable doubt. The Karnataka HC sustained the acquittal.

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Issues: Whether the accused had successfully rebutted the presumption arising under the Negotiable Instruments Act and whether the cheques were proved to have been issued in discharge of a legally enforceable debt so as to warrant interference with the acquittal.

Analysis: The complaint did not contain a clear and specific date of advancement of the alleged hand loan, and the claim that a substantial cash loan was advanced without security, interest, or supporting proof of financial capacity was found unsubstantiated. The complainant's own cross-examination and surrounding circumstances, including the existence of civil litigation between the parties and the absence of documentary evidence of income or source of funds, weakened the claim of debt. The defence evidence and documents were accepted as sufficient to rebut the statutory presumption on the standard of preponderance of probabilities, and once the presumption stood rebutted, the burden shifted back to the complainant to prove the debt beyond reasonable doubt.

Conclusion: The cheques were not proved to have been issued in discharge of a legally enforceable debt, and the acquittal was sustained.

Final Conclusion: The challenge to the acquittal failed because the complainant did not establish the foundational facts necessary for conviction under the Negotiable Instruments Act.

Ratio Decidendi: Where the accused rebuts the statutory presumption by showing a probable defence and the complainant fails to prove financial capacity and the existence of a legally enforceable debt, conviction under Section 138 cannot be sustained.

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