HC Quashes Sec. 138 Complaint as Non-Disclosure of Lawyer-Client Relationship Invalidated Enforceable Debt Claim

Case Details: Ram Sharan Singh vs. State of U.P. - [2025] 170 taxmann.com 149 (Allahabad)

Judiciary and Counsel Details

• Mrs Manju Rani Chauhan, J.
• Ashok Kumar Singh & Sanjeev Singh for the Applicant.
• Vikas Singh for the Respondent.

Facts of the Case

In the instant case, the respondent filed a complaint under section 138 of the Negotiable Instruments Act, 1881, alleging that petitioner issued a cheque in discharge of his legally enforceable liability but same was dishonored on presentation.

The Trial Court by impugned order summoned the petitioner. Consequently, the Petitioner filed instant petition seeking quashing of summoning order as well as complaint case. It was noted that the respondent had engaged the petitioner as a lawyer in few cases.

The respondent however, had deliberately not disclosed in complaint about the lawyer-client relationship, thus, very basis of filing of complaint was dislodged as fact of legally enforceable debt could not be proved unless real relationship was disclosed, due to which alleged cheque was given by petitioner.

Further, payment by means of subject cheque was made by petitioner towards advance payment for purchase of car from the respondent but since condition of grant of car loan in favor of petitioner was not fulfilled, agreement between parties for purchase of car became void.

Therefore, the petitioner asked respondent for returning him his cheque. But respondent instead of returning cheque, presented same in bank. Respondent had also not been able to prove his case that cheque was not given as advance, and hence, probable defense as raised by petitioner creates doubt about existence of a legally enforceable debt of liability.

Furthermore, the respondent had not been able to disclose as to how he made arrangements of such a huge amount of money.

High Court Held

The High Court held that the it was a fit case for exercising powers under Section 482 Cr.P.C. Accordingly, entire proceedings of Complaint Case as well as summoning order passed by the Chief Judicial Magistrate was to be quashed.

List of Cases Reviewed

• West Bengal State Electricity Board v. Dilip Kumar Ray (Para 93) followed.

List of Cases Referred to

• Indus Airways Pvt. Ltd. and Others v. Magnum Aviation Pvt. Ltd. and Another 2014 (12) SCC 539 (para 8 and 30)
• Sunil Todi and Others v. State of Gujarat and Another (2022) 16 SCC 762 (para 11)
• Indian Bank Association and Others v. Union of India and Others (2014) 5 SCC 590 (para 18)
• Sunil Todi and Others v. State of Gujarat & Another (2022) 16 SCC 762 (para 20)
• Ripudaman Singh v. Balakrishna (2019) 4 SCC 767 (para 21)
• Dasharathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel (2023) 1 SCC 578 (para 26)
• Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited (2016) 10 SCC 458 (para 8 and 30)
• Vijay Dhanuka v. Najima Mamtaj (2014) 14 SCC 638 (para 36)
• Abhijir Pawar v. Hemant Madhukar Nimbalkar and another (2017) 2 SCC 528 (para 37)
• Sunil Todi v. The State of Gujarat (2022) 16 SCC 762 (para 38)
• Kali Ram v. State of Himachal Pradesh (1973) 2 SCC 808 (para 44)
• Bharat Barrel & Drum Manufacturing Company v. Amin Chand Pyarelal (1999) 3 SCC 35 (para 45)
• M.S. Narayana Menon Alias Mani v. State of Kerala and another (2006) 6 SCC 39 (para 46)
• Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008) 4 SCC 54 (para 49)
• Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 (para 51)
• Rangappa v. Sri Mohan (2010) 11 SCC 441 (para 52)
• R.P. Kapur v. State of Punjab; AIR 1960 SC 866 (para 60)
• State of Haryana and others v. Ch. Bhajan Lal and others; (1) SCC 335 (para 60)
• State of Bihar and another v. P.P. Sharma and another; (1) SCC 222 (para 60)
• Zandu Pharmaceuticals Works Ltd. and others v. Mohammad Shariful Haque and another; 2005 (1) SCC 122 (para 60)
• M.N. Ojha v. Alok Kumar Srivastava; 2009 (9) SCC 682 (para 60)
• Prashant Bharti v. State of NCT of Delhi (2013) 9 SCC 293 (para 67)
• Parbatbhai Ahir v. State of Gujarat (2017) 9 SCC 641 (para 68)
• Monica Kumar (Dr.) Anr. v. State of U.P. (2008) 8 SCC 781 (para 70)
• State of Karnataka v. L. Muniswamy (1977) 2 SCC 699 (para 72)
• Indian Oil Corporation v. NEPC India Ltd. And Ors. (2006) 6 SCC 736 (para 74).