Rebuttable presumption under the Negotiable Instruments Act fails when the complainant cannot prove debt or financial capacity.

Admission of the cheque and signature under the Negotiable Instruments Act raises a rebuttable presumption in favour of the complainant, but the complainant must still prove a legally enforceable debt. The accused can rebut the presumption on a preponderance of probabilities by showing a probable defence. Here, the complainant failed to prove the alleged loan transaction or financial capacity, did not produce bank records, and could not establish the timing or surrounding circumstances of the claimed cash advance. The defence version was found more probable, so the acquittal was upheld.

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Issues: Whether the trial court erred in acquitting the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The cheque and signature were not disputed, so the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 arose in favour of the complainant. Those presumptions were rebuttable. The accused set up a probable defence that the cheque was not issued towards the complainant and that the complainant had not proved the alleged loan transaction or his financial capacity to advance the amount. The complainant, a retired government employee, did not produce bank records, did not establish the exact date of advancement of the loan, and did not adduce material to show availability of funds or the surrounding circumstances of the alleged cash loan. The defence version was found to be more probable, and the complainant failed to prove that the cheque was issued in discharge of a legally enforceable debt.

Conclusion: The trial court did not err in acquitting the accused, and the challenge to the acquittal failed.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, admission of cheque and signature raises a rebuttable presumption, but the complainant must still establish a legally enforceable debt and the accused may rebut the presumption on a preponderance of probabilities.

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