Cheque drawer liability under Section 138 depends on the account and liability connection; prima facie material justified leave to appeal.

For liability under Section 138 of the Negotiable Instruments Act, 1881, the cheque must be drawn by the person sought to be made liable on an account maintained by that person for discharge of a debt or other liability. In examining leave to appeal against acquittal under Section 378(4) CrPC, the HC considered prima facie material showing that the disputed cheque was signed by the accused in his individual capacity, while earlier cheques were signed as authorised signatory of the company. On that material, the Court held that the relationship between the drawer, the account and the alleged liability required further consideration and granted leave to appeal.

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Issues: Whether leave to appeal against acquittal under Section 378(4) of the Code of Criminal Procedure, 1973 should be granted in a prosecution under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The application was examined on the basis of the cheque transactions placed on record. The disputed cheque was signed by the accused in his individual capacity, while earlier cheques on record indicated his signature as authorised signatory of the company. On that prima facie material, the Court found that the relationship between the drawer, the account, and the alleged liability required consideration. The Court also treated the question of liability under Section 138 as depending on whether the cheque was drawn on an account maintained by the person sought to be made liable for discharge of a debt or other liability.

Conclusion: Leave to appeal was granted because the challenge to the acquittal required consideration on the available prima facie material.

Ratio Decidendi: For liability under Section 138 of the Negotiable Instruments Act, 1881, the person sought to be made liable must be the drawer of the cheque drawn on an account maintained by him for discharge of a debt or other liability, and prima facie material showing that connection can justify interference with an acquittal.

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