Section 139 presumption in cheque dishonour complaints cannot be rebutted at the process stage; liability must be tried on evidence.

At the stage of issuance of process in a Section 138 NI Act complaint, once the complainant pleads the foundational facts of cheque issuance, dishonour, statutory notice and timely filing, the Section 139 presumption arises in favour of the holder, including that the cheque was issued for a legally enforceable debt or liability. That presumption operates as a reverse onus and cannot ordinarily be treated as rebutted without evidence at the threshold. Where issuance and signature on the cheque are undisputed, the existence of liability is a matter for trial, to be tested on evidence. The pre-trial dismissal of the complaint was therefore unsustainable, and the complaint had to be restored for decision on merits.

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Issues: Whether, at the stage of issuance of process in a complaint under Section 138 of the Negotiable Instruments Act, 1881, the complaint could be dismissed on the ground that the cheque was not issued towards a legally enforceable debt or liability and the statutory presumption under Section 139 could be treated as rebutted before trial.

Analysis: Once the complaint disclosed the foundational facts of issuance of cheque, its dishonour, service of statutory notice and filing within limitation, the presumption under Section 139 arose in favour of the holder of the cheque. That presumption includes the existence of a legally enforceable debt or liability and operates as a reverse onus clause. Its rebuttal requires evidence and cannot ordinarily be undertaken in a summary manner at the stage of process. Where the drawer does not dispute issuance and signature on the cheque, the question whether the cheque was supported by a legally enforceable liability remains a matter for trial, to be tested on evidence. The revisional and writ courts therefore erred in giving decisive weight to the alleged absence of a concluded settlement and in terminating the prosecution before evidence was led.

Conclusion: The dismissal of the complaint at the pre-trial stage was unsustainable, and the complaint was required to be restored for adjudication on merits.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the complainant establishes the basic ingredients for issuance of process, the presumption under Section 139 that the cheque was issued for discharge of a legally enforceable debt or liability cannot be displaced at the threshold and must be rebutted at trial.

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