2004 (7) TMI 671 - HC - Indian Laws

Challenged the order of acquittal - Acquittal of the respondent/accused u/s 138 of the Negotiable Instruments Act (N.I. Act) by the trial Magistrate - Whether the trial Court was not right in finding that there is no debt or legally enforceable liability? - HELD THAT - To attract the penal provisions under Section 138 N. I. Act, a cheque must have been drawn by the accused on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability due. That means, the cheque must have been issued in discharge of debt or other liability wholly or in part. The cheque given for any other reasons not for the satisfaction of any debt or other liability, even if it is returned unpaid-, will not meet with penal consequences. The High Court highlighted the trust and confidence in the lawyer-client relationship, emphasizing the need for clear evidence of the debt or liability for a cheque to attract penal provisions u/s 138. The absence of an agreement specifying the fee arrangement between the complainant and the accused led to the dismissal of the appeal against acquittal. The High Court noted that interference with an order of acquittal is warranted only in cases of glaring infirmities resulting in a miscarriage of justice, which was not established in this appeal. In conclusion, the appeal challenging the acquittal of the respondent/accused u/s 138 of the N.I. Act was dismissed by the High Court, as the complainant failed to prove the existence of a debt or legally enforceable liability, thus upholding the trial court's decision.

Summary

Issues Involved:
The judgment involves the issue of acquittal of the respondent/accused under Section 138 of the Negotiable Instruments Act (N.I. Act) by the trial Magistrate, leading to an appeal by the complainant challenging the order of acquittal.

Summary:

Issue 1: Finding of No Debt or Legally Enforceable Liability
The complainant, who is also the appellant, claimed that the accused owed him &8377;43,600 as legal fees. The accused, a client of the complainant, had issued a cheque which bounced due to insufficient funds and stop payment. The trial Magistrate acquitted the accused, finding no debt or legally enforceable liability. The appellant argued that the trial court erred in not drawing the presumption under Section 139 of the N.I. Act. However, the High Court upheld the acquittal, emphasizing the need for proof of debt or liability for penal consequences under Section 138.

Issue 2: Infirmity in the Order of Acquittal
The High Court highlighted the trust and confidence in the lawyer-client relationship, emphasizing the need for clear evidence of the debt or liability for a cheque to attract penal provisions under Section 138. The absence of an agreement specifying the fee arrangement between the complainant and the accused led to the dismissal of the appeal against acquittal. The High Court noted that interference with an order of acquittal is warranted only in cases of glaring infirmities resulting in a miscarriage of justice, which was not established in this appeal.

In conclusion, the appeal challenging the acquittal of the respondent/accused under Section 138 of the N.I. Act was dismissed by the High Court, as the complainant failed to prove the existence of a debt or legally enforceable liability, thus upholding the trial court's decision.