Rebuttable presumptions under the Negotiable Instruments Act fail where the complainant cannot prove delivery and legally recoverable debt.

In a prosecution under the Negotiable Instruments Act, 1881, the statutory presumptions under Sections 118 and 139 are rebuttable, and the accused may do so by raising a probable defence. The accused relied on denial of delivery of goods, prior issuance of the cheque book, and stop-payment instructions supported by bank witnesses, while the complainant failed to prove delivery or acknowledgment of delivery despite invoices. Once the presumption was rebutted, the complainant had to prove a legally recoverable debt or liability, which was not established. The appellate court's decision to set aside the conviction under Section 138 was therefore sustained and the acquittal maintained.

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Issues: (i) Whether the accused had rebutted the statutory presumption arising under the Negotiable Instruments Act, 1881. (ii) Whether the appellate court was correct in setting aside the conviction under Section 138 of the Negotiable Instruments Act, 1881.

Issue (i): Whether the accused had rebutted the statutory presumption arising under the Negotiable Instruments Act, 1881.

Analysis: The presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operate in favour of the holder of the cheque, but they are rebuttable. The accused had specifically taken the stand in the reply notice that the plywood was not delivered, that the cheque book had been issued earlier, and that stop-payment instructions had already been given. The accused examined bank witnesses to support the issuance of stop-payment instructions and the earlier issuance of the cheque book. The complainant, on the other hand, failed to prove delivery of the goods or any acknowledgment for delivery, despite relying on invoices.

Conclusion: The accused had successfully raised a probable defence and rebutted the presumption.

Issue (ii): Whether the appellate court was correct in setting aside the conviction under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Once the presumption stood rebutted, the burden shifted back to the complainant to prove a legally recoverable debt or liability. The complainant failed to establish delivery of the goods and therefore failed to prove the foundational liability required for an offence under Section 138. The appellate court's view that the conviction could not stand was supported by the evidence and did not call for interference.

Conclusion: The appellate court was correct in setting aside the conviction, and the acquittal was sustained.

Final Conclusion: The appeal failed because the complainant did not prove the underlying debt or liability after the accused rebutted the statutory presumption, and the acquittal was maintained.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the accused raises a probable defence and rebuts the statutory presumption, the complainant must prove the legally recoverable debt or liability, failing which conviction cannot be sustained.

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