Legally enforceable debt requirement under cheque dishonour law upheld after the accused rebutted the statutory presumption.

A conviction under Section 138 of the Negotiable Instruments Act cannot stand unless the complainant proves a legally enforceable debt or liability. Here, although the cheque was issued and dishonoured, the record showed no agreement for execution of work, no bill supporting the alleged expenditure, and no reliable material proving an admitted liability. The accused rebutted the statutory presumption by showing that no subsisting liability existed, and the appellate court's finding that the service arrangement had ended immediately and the demand was for return of the cheque was held sustainable. The conviction and sentence were therefore left undisturbed in the sense that the appellate order setting them aside was upheld, and the revisions failed.

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Issues: Whether the appellate court was right in setting aside the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 on the ground that the complainant failed to establish a legally enforceable debt or liability and the accused had rebutted the statutory presumption.

Analysis: The cheque was issued and dishonoured, but the record disclosed no agreement for execution of work, no bill evidencing expenditure in performance of the alleged contract, and no reliable material showing an admitted liability of the accused. On the evidence, the accused succeeded in rebutting the presumption arising under the negotiable instruments law by showing that there was no subsisting liability. The appellate court's view that the service arrangement had been terminated immediately and that the demand was therefore for return of the cheque was found to be sustainable.

Conclusion: The setting aside of the conviction and sentence was upheld, and the challenge by the complainant failed.

Final Conclusion: The criminal revision challenging acquittal of the accused and the connected revision seeking enhancement of sentence were both rejected, leaving the appellate order intact.

Ratio Decidendi: A conviction under Section 138 of the Negotiable Instruments Act, 1881 cannot stand unless the complainant establishes a legally enforceable debt or liability, and the accused successfully discharges the burden of rebutting the statutory presumption.

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