Statutory presumption in cheque dishonour cases is rebuttable; failure to prove enforceable debt and financial capacity sustains acquittal.

In cheque dishonour prosecutions, once the accused raises a probable defence and rebuts the statutory presumption under the Negotiable Instruments Act, the complainant must independently prove a legally enforceable debt. Here, the Court found that the defence version of blank or security cheques, together with the absence of satisfactory proof of the loan transaction, rebutted the presumption under Section 139. The complainant also failed to establish adequate financial capacity or to reflect the alleged loans in income-tax records. As the acquittal was neither perverse nor unreasonable, no interference was called for and the acquittal was affirmed.

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Issues: Whether the acquittal of the accused in prosecutions under Section 138 of the Negotiable Instruments Act, 1881 was liable to be interfered with on the ground that the complainant had proved issuance and dishonour of the cheque but had not established the source of funds or a legally enforceable debt, and whether the accused had successfully rebutted the statutory presumption.

Analysis: The complaints rested on the assertion that the accused had borrowed money, issued cheques towards repayment, and that the cheques were returned unpaid for insufficiency of funds, followed by statutory notice. The Court noted that the defence evidence and surrounding circumstances created a probable defence that the cheques were blank/security cheques and that no loan transaction was satisfactorily proved. It further held that the complainant had not shown adequate financial capacity to advance the alleged amounts and that the alleged loans were not reflected in the income-tax record. In these circumstances, the presumption under Section 139 of the Negotiable Instruments Act, 1881 stood rebutted and the complainant failed to prove the projected case beyond the rebutted presumption.

Conclusion: The acquittal was upheld and no interference was called for.

Final Conclusion: The appeals against acquittal failed, and the judgments of acquittal passed by the trial court were affirmed.

Ratio Decidendi: Once the statutory presumption under the Negotiable Instruments Act is rebutted by a probable defence, the complainant must independently establish the legally enforceable debt and the appellate court will not interfere with an acquittal unless the finding is perverse or unreasonable.

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