Cheque presumptions under the Negotiable Instruments Act can be rebutted by a probable defence and surrounding inconsistencies in the complainant's case.

In a prosecution under Section 138 of the Negotiable Instruments Act, admitted cheque execution and signatures triggered the presumptions under Sections 118(a) and 139 in favour of the complainant. The accused rebutted those presumptions by showing a probable defence on a preponderance of probabilities through inconsistencies in the complainant's loan version, absence of supporting records, conflicting accounts of prior transactions, and surrounding circumstances including stop-payment instructions. Once rebutted, the burden shifted back to the complainant, who failed to prove that the cheque was issued towards a legally enforceable debt or liability. The acquittal was therefore upheld.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act was liable to be set aside, and whether the accused had rebutted the statutory presumptions arising under Sections 118(a) and 139 of the Act by establishing a probable defence.

Analysis: The cheque and signatures were admitted, so the statutory presumptions under Sections 118(a) and 139 operated in favour of the complainant. Those presumptions were rebuttable, and the accused were required only to establish a probable defence on the standard of preponderance of probabilities. On the evidence, the Court found material inconsistencies in the complainant's version regarding the loan transaction, the absence of supporting loan records and account particulars, the conflicting stand regarding the earlier property transactions, and the circumstances surrounding the cheque and stop-payment instruction. The Court held that these circumstances were sufficient to rebut the presumption and shift the burden back to the complainant, who failed to prove that the cheque had been issued towards a legally enforceable debt or liability.

Conclusion: The accused successfully rebutted the statutory presumption, and the complainant failed to establish the alleged debt and cheque liability. The acquittal was upheld.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, once the accused admits the cheque and signature, the presumptions under Sections 118(a) and 139 arise, but they may be rebutted by a probable defence proved on a preponderance of probabilities from the complainant's own evidence and surrounding circumstances; if rebutted, the complainant must then independently prove the legally enforceable debt or liability.

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