Rebuttable cheque presumptions defeated by weak loan evidence and inconsistent testimony, so leave to appeal against acquittal was declined.

In a Section 138 Negotiable Instruments Act prosecution, admission of the cheque signature triggered the presumptions under Sections 118(a) and 139, but those presumptions remained rebuttable on a preponderance of probabilities. The complainant's case failed because the alleged loan transaction, source and mode of payment, and claimed financial capacity were not supported by bank records, income tax returns, or other corroboration, and the mortgage security was also unproved. The accused's explanation that the cheque was issued as security, together with inconsistencies in the complainant's evidence, was held sufficient to rebut the statutory presumption. The acquittal was found untainted by perversity or legal infirmity, so leave to appeal was declined.

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Issues: Whether leave to appeal against the acquittal under Section 138 of the Negotiable Instruments Act, 1881 should be granted when the accused admitted his signature on the cheque but the complainant failed to prove the loan transaction and financial capacity.

Analysis: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the presumptions under Section 118(a) and Section 139 operate once the execution of the cheque is admitted, but those presumptions remain rebuttable. The accused is not required to prove his defence beyond reasonable doubt and may rebut the presumption by showing a probable defence on the touchstone of preponderance of probabilities, including by relying on inconsistencies and deficiencies in the complainant's evidence. On the record, the complainant's version about the source and mode of advancement of the alleged loan was found inconsistent and unsupported by corroborative material. The complainant failed to substantiate the alleged payment through bank records or income tax returns, and the claimed mortgage security also remained unproved. The accused's explanation that the cheque was issued as security, coupled with the contradictions in the complainant's evidence, was held sufficient to rebut the statutory presumption.

Conclusion: The acquittal was found to be well-reasoned and free from perversity or legal infirmity, and leave to appeal was declined.

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