Cheque presumption under negotiable instruments law can be rebutted by inconsistent proof of debt and financial capacity.

Admitted execution of a cheque triggers presumptions under Sections 118 and 139 of the Negotiable Instruments Act, but those presumptions are rebuttable on a preponderance of probabilities. Where the accused disputes the loan and challenges the complainant's financial capacity, the complainant must then prove a legally enforceable debt with reliable evidence. In the text, inconsistent evidence on the source of funds, lack of supporting records, mismatch with account entries, and unexplained repeated presentations of the cheque undermined the claim. The result described is that the presumption was rebutted, the burden shifted back, and failure to prove the transaction and capacity defeated the prosecution under Section 138.

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Issues: Whether the accused rebutted the statutory presumption arising from the admitted cheque and signature and whether the complainant proved a legally enforceable debt and his financial capacity to lend the amount under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Admitted execution of the cheque attracted the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, but those presumptions were rebuttable on a preponderance of probabilities. The accused disputed the loan and challenged the complainant's capacity to advance the amount. The complainant's evidence on source of funds was found inconsistent, unsupported by any agricultural records or other proof of sale proceeds, and his version regarding the manner and timing of lending did not fully align with the account entries. The evidence also revealed unexplained repeated presentations of the cheque, which undermined the complainant's case. In these circumstances, the statutory presumption stood rebutted and the burden shifted back to the complainant, who failed to prove the transaction and his financial capacity beyond reasonable doubt.

Conclusion: The complainant failed to establish the foundational facts necessary to sustain the conviction under Section 138 of the Negotiable Instruments Act, 1881, and the accused was entitled to acquittal.

Ratio Decidendi: Once the accused rebuts the presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, the complainant must prove the legally enforceable debt and financial capacity with reliable evidence beyond reasonable doubt; failure to do so defeats prosecution under Section 138.

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