Statutory presumption in cheque dishonour cases prevails unless the accused rebuts liability with a probable defence.

In a prosecution under Section 138 of the Negotiable Instruments Act, admission or proof of the cheque and its dishonour for insufficiency of funds triggered the presumption under Section 139 in favour of the holder. The accused was required to rebut that presumption by a probable defence on the preponderance of probabilities, and the complainant was not obliged to independently prove the debt unless the presumption was displaced. The High Court found that the trial court had misread the accused's Section 313 CrPC statement and the complainant's cross-examination, and had wrongly ignored the statutory presumption. As the defence failed to rebut the presumption of legally enforceable liability, the acquittal was set aside and the matter was directed to proceed on sentence.

---

---

Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act could be sustained in view of the statutory presumption under Section 139 and the defence set up by the accused.

Analysis: The cheque, its issuance and its dishonour for insufficiency of funds stood established. The Court held that once execution of the cheque is admitted or proved, the presumption under Section 139 operates in favour of the holder and the burden shifts to the accused to rebut it by raising a probable defence on the standard of preponderance of probabilities. The Court found that the trial Court had misread the effect of the accused's statement under Section 313 of the Code of Criminal Procedure and the cross-examination of the complainant, and had wrongly treated the complainant as required to prove the debt independently despite the statutory presumption. On a harmonious reading of the evidence, the Court held that the defence had not successfully displaced the presumption that the cheque was issued towards a legally enforceable liability.

Conclusion: The acquittal was unsustainable and was set aside; the appeal was allowed in favour of the complainant/appellant, and the matter was directed to proceed on the question of sentence.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, admission or proof of the cheque and its dishonour triggers the presumption under Section 139, and the accused must rebut it by a probable defence on a preponderance of probabilities; the complainant is not required to independently prove the debt unless the presumption is displaced.

---