Cheque presumptions under the Negotiable Instruments Act can be rebutted by a probable defence and failure to prove debt.

In a prosecution under Section 138 of the Negotiable Instruments Act, the admitted execution of the cheque raised presumptions under Sections 118 and 139, but those presumptions remained rebuttable on a preponderance of probabilities. The accused discharged that burden through inconsistencies in the complainant's version of the loan transaction, the limited knowledge of the power of attorney holder, and the complainant's failure to produce relevant accounts despite a Section 91 CrPC direction. The court held that the complainant did not prove a legally recoverable debt or the underlying liability, so the accused's probable defence succeeded and the acquittal stood.

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Issues: Whether the accused had rebutted the statutory presumptions under the Negotiable Instruments Act by showing that there was no legally recoverable debt or liability, and whether the complainant proved the transaction underlying the cheque.

Analysis: Execution of the cheque having been admitted, the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant, but they remained rebuttable on a preponderance of probabilities. The evidence showed that the complainant's version of a loan transaction did not tally with the hire purchase agreement produced, the power of attorney holder could not speak to the entire transaction or to the circumstances surrounding the earlier notice relating to the same transaction, and the complainant failed to produce the relevant accounts despite an order under Section 91 of the Code of Criminal Procedure, 1973. In these circumstances, the accused was entitled to rely on the materials on record to raise a probable defence, and the absence of satisfactory proof of the underlying liability weakened the complainant's case.

Conclusion: The accused successfully rebutted the statutory presumptions, and the complainant failed to establish a legally recoverable debt supporting the cheque claim; the conviction could not be restored.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, the accused may rebut the presumptions under Sections 118 and 139 by a probable defence proved on preponderance of probabilities from the complainant's own materials and surrounding circumstances, and where the complainant fails to prove the underlying liability, acquittal will stand.

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