Rebuttable presumption in cheque dishonour cases defeated where loan proof and financial capacity were not established.

The request for leave to appeal against acquittal under Section 138 of the Negotiable Instruments Act turned on the rebuttable presumptions under Sections 118 and 139. Once cheque execution was shown, the complainant still had to withstand a probable defence on a preponderance of probabilities. Cross-examination created serious doubt about the alleged cash loan because there was no documentary support, no disclosure in income tax returns, no proof of financial capacity, and no production of the alleged power of attorney. The defence material, including the accused's complaint and a suicide note, was sufficient to rebut the presumption, so leave to appeal was refused and the acquittal stood.

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Issues: Whether leave to appeal against the acquittal under Section 138 of the Negotiable Instruments Act, 1881 should be granted in view of the complainant's proof of debt, the accused's rebuttal of the statutory presumption, and the complainant's financial capacity.

Analysis: The complaint rested on the assertion that the accused had borrowed a substantial cash amount and issued cheques in discharge of that liability. The statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operates once execution of the cheque is established, but it remains rebuttable on the standard of preponderance of probabilities. On the record, the complainant's cross-examination created serious doubt about the existence of the alleged loan, including the absence of documentary support, the omission of the transaction from income tax returns, the lack of proof of financial capacity to advance such a large cash amount, and the non-production of the alleged power of attorney. The defence version, supported by the accused's complaint material and a suicide note, was found sufficient to raise a probable defence and to rebut the presumption.

Conclusion: Leave to appeal was not warranted and was refused; the acquittal was left undisturbed.

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