Section 139 presumption in cheque dishonour cases is rebuttable only by a probable defence on preponderance of probabilities.

In a prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumption under Section 139 arises once execution of the cheque is admitted, and the accused must rebut it only on a preponderance of probabilities. The defence may be shown through the accused's evidence, the complainant's materials, or effective cross-examination, but a mere assertion of loss of a cheque book or signed leaf is insufficient without contemporaneous support. The complainant need not prove financial capacity at the outset unless the accused lays a credible factual challenge. On the facts discussed, the presumption was not displaced, the conviction was sustained, and the sentence could be modified on the circumstances.

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Issues: (i) Whether the accused had raised a probable defence sufficient to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 in a prosecution under Section 138 of that Act. (ii) Whether the conviction required interference on the ground that the complainant's financial capacity and the surrounding circumstances had not been properly appreciated, and whether the sentence of imprisonment should be altered.

Issue (i): Whether the accused had raised a probable defence sufficient to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 in a prosecution under Section 138 of that Act.

Analysis: Once execution of the cheque is admitted, a presumption arises that it was issued in discharge of a debt or liability. That presumption is rebuttable. The accused is not required to prove his defence beyond reasonable doubt; it is enough to raise a probable defence on the touchstone of preponderance of probabilities. Such defence may be established through the accused's own evidence, the complainant's materials, or cross-examination of the complainant's witnesses. The record was assessed in that light, including the defence evidence and the absence of a contemporaneous complaint regarding the alleged loss of the cheque book or signed cheque leaf.

Conclusion: The presumption was not rebutted to the extent necessary to displace the conviction under Section 138 of the Negotiable Instruments Act, 1881.

Issue (ii): Whether the conviction required interference on the ground that the complainant's financial capacity and the surrounding circumstances had not been properly appreciated, and whether the sentence of imprisonment should be altered.

Analysis: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the complainant is not required in the first instance to prove financial capacity unless the accused sets up a credible challenge supported by materials. The evidence and surrounding circumstances were examined as a whole, including the reply notice, the defence version regarding loss of the cheque book, and the absence of proof that such loss was reported to the bank or police. While conviction was sustained, the Court found it appropriate to modify the punishment having regard to the facts and the deposit already made.

Conclusion: The conviction was upheld, but the sentence of imprisonment was substituted by a fine and additional compensation was directed, in favour of the appellant only to that limited extent.

Final Conclusion: The appeal succeeded only in part: the finding of guilt under Section 138 of the Negotiable Instruments Act, 1881 was maintained, but the custodial sentence was replaced with monetary punishment and further compensation.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the accused can rebut the statutory presumption by raising a probable defence on preponderance of probabilities, including through cross-examination and surrounding circumstances, and the complainant's financial capacity need not be proved in the first instance unless a credible challenge is laid.

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