Rebuttal of cheque presumptions defeats Section 138 where part payment shows the cheque no longer covered an enforceable debt.

Under the Negotiable Instruments Act, a cheque attracts Section 138 only if, at presentation, it represents a legally enforceable debt. The Kerala HC text states that part payment after issuance of the cheque, together with evidence indicating that the balance liability was reflected in a later cheque, rebutted the presumptions under Sections 118(a) and 139. The accused succeeded on a preponderance of probabilities by showing a probable defence, and the burden shifted back to the complainant, who failed to prove enforceable liability at encashment.

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Issues: Whether the accused had rebutted the statutory presumptions under the Negotiable Instruments Act, 1881, and whether the cheque presented for encashment represented a legally enforceable debt so as to attract Section 138.

Analysis: The finding that the complainant had received a substantial part payment after the cheque was drawn, coupled with the concurrent findings that the balance liability stood reflected by the later cheque and that the earlier cheque no longer represented the enforceable debt at the time of presentation, displaced the presumption arising under Sections 118(a) and 139. The material alteration found in relation to the other cheque and the acceptance of the receipt evidencing part payment strengthened the probable defence. Once the accused established a defence on the touchstone of preponderance of probabilities, the burden shifted back to the complainant, who failed to establish that the cheque in question remained supported by a legally enforceable debt at the time of encashment.

Conclusion: The statutory presumptions stood rebutted and the prosecution under Section 138 failed.

Ratio Decidendi: A cheque presented after part payment of the underlying debt does not attract Section 138 unless, at the time of presentation, it still represents a legally enforceable liability, and the accused may rebut the presumptions under Sections 118(a) and 139 on a preponderance of probabilities by showing a probable defence.

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