Cheque presumption rebuttable where complainant cannot prove loan transaction and financial capacity in a Section 138 dispute.

Where the cheque signature is admitted in a prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumption remains rebuttable, but the complainant must prove the alleged loan transaction and, when specifically challenged, the financial capacity to advance the amount. Here, the accused raised a probable defence that the cheque related to a chit transaction, while the complainant's evidence failed to show when the hand loan was advanced, how the cheque was issued, or that he or his son had the means to fund the loan. On these facts, the presumption stood displaced on a preponderance of probabilities and the acquittal did not call for interference.

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Issues: Whether the acquittal for the offence under Section 138 of the Negotiable Instruments Act, 1881 called for interference in appeal, having regard to the statutory presumption and the complainant's proof of the loan transaction and financial capacity.

Analysis: The cheque signature was not disputed, but the accused rebutted the presumption by setting up a probable defence that the cheque had been issued in connection with a chit transaction with the complainant's wife. The complainant's version of advancing a hand loan of Rs. 4,80,000/- remained unsupported by specific pleadings as to the date of advancement and the circumstances of issuance of the cheque. The complainant's own evidence showed that he did not have the entire amount readily available, that part of the sum was allegedly arranged through his son, and that no material was produced to establish either his cash availability or the son's financial capacity. The surrounding circumstances, including the questioned bank endorsement, admissions regarding the wife's chit dealings, and the document relied on by the complainant indicating a different debt figure, created serious doubt about the alleged loan transaction. In a case where financial capacity is specifically disputed, the complainant must establish financial soundness to advance such a sum, and the accused need only rebut the presumption on a preponderance of probabilities.

Conclusion: The complainant failed to prove the loan transaction and the financial capacity required to sustain the prosecution, and the acquittal did not warrant interference.

Ratio Decidendi: When the drawer's signature on a cheque is admitted, the statutory presumption remains rebuttable, but if the complainant's financial capacity to advance the alleged loan is specifically challenged, the complainant must establish that capacity and the accused may displace the presumption by a probable defence on the preponderance of probabilities.

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