Presumption of cheque liability rebutted where probable defence showed no legally enforceable debt and acquittal stood.

Under the Negotiable Instruments Act, admission of cheque signatures raises presumptions of liability, but the accused may rebut them on a preponderance of probabilities through direct or circumstantial evidence, inconsistencies in the complainant's case, or cross-examination. Here, the complainant failed to prove the alleged loan or investment, the asserted business liability lacked reliable accounts and documentary support, the payment mode was unproved, and the acknowledgement documents were doubtful. The defence that the cheques were missing or stolen and that stop-payment instructions had been issued was found probable. The presumptions were rebutted, no legally enforceable debt was established, and the acquittal was left undisturbed.

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Issues: Whether the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 stood rebutted and whether there was any legally enforceable debt or liability warranting interference with the acquittal.

Analysis: In prosecutions under Section 138 of the Negotiable Instruments Act, 1881, admission of the cheque signatures attracts the presumptions under Sections 118 and 139, but the accused may rebut them on a preponderance of probabilities. The defence may be established through direct or circumstantial evidence, inconsistencies in the complainant's case, or material elicited in cross-examination. On the evidence, the complainant failed to establish the alleged investment or loan of INR 1.10 crores, the asserted business liability was not supported by reliable accounts or documentary proof, the mode of payment remained unproved, and the alleged acknowledgement documents were found doubtful. The respondents' case that the cheques were missing or stolen and that stop-payment instructions had been issued was found to be a probable defence.

Conclusion: The statutory presumptions were rebutted, the complainant failed to prove a legally enforceable debt, and the acquittal called for no interference.

Ratio Decidendi: Once the accused raises a probable defence on a preponderance of probabilities showing the non-existence of a legally enforceable debt or liability, the presumption under Section 139 stands displaced and the complainant must affirmatively prove the debt as a matter of fact.

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