Negotiable Instruments Act presumptions rebutted by probable defence, leaving the complainant to prove the debt and sustaining acquittal.

In a Section 138 prosecution, the presumptions under Sections 118(a) and 139 arise once cheque execution is admitted, but they remain rebuttable on a preponderance of probabilities. Where the accused sets up a probable defence, including that the cheques were security cheques and that the alleged cash loan was unsupported by documents, witnesses, or proof of financial capacity, the burden shifts back to the complainant to prove the legally enforceable debt as a matter of fact. An acquittal resting on that evidentiary failure, and not on perversity, does not warrant interference in leave to appeal proceedings.

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Issues: Whether the acquittal under Section 138 of the Negotiable Instruments Act, 1881 was liable to be interfered with in leave to appeal proceedings; and whether the respondents had rebutted the statutory presumption by raising a probable defence so as to shift the burden back to the complainant to prove the debt or liability.

Analysis: Once execution of the cheques was admitted, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 arose in favour of the complainant. Those presumptions were, however, rebuttable, and the respondents could discharge their burden by showing a probable defence on a preponderance of probabilities. The record showed a consistent defence that the parties were in a business relationship, that the cheques were security cheques, and that the complainant had not proved the alleged cash loan by any document, witness, date, purpose, or material showing financial capacity to advance such a large amount. On the respondents raising a probable defence, the burden shifted back to the complainant to establish the debt as a matter of fact. The challenged acquittal was based on that evidentiary failure and not on a mere adverse inference from non-production of income-tax returns.

Conclusion: The respondents had successfully rebutted the statutory presumptions, and the complainant failed to prove the existence of a legally enforceable debt or liability. The acquittal called for no interference.

Final Conclusion: The leave petitions were not entertained and the acquittal of the respondents under Section 138 of the Negotiable Instruments Act, 1881 stood undisturbed.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the accused raises a probable defence on a preponderance of probabilities, the presumptions under Sections 118(a) and 139 stand displaced and the complainant must then prove the debt or liability as a matter of fact; an acquittal based on such failure does not warrant appellate interference absent perversity.

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