Quashing of cheque dishonour complaint refused where post-induction cheque issuance left disputed partnership liability for trial

A petition to quash proceedings under Section 138 of the Negotiable Instruments Act was rejected because the cheque was issued and dishonoured after the petitioners had been inducted as partners. The Court held that, in a quashing petition under Section 482 CrPC, it would not decide the disputed question whether the underlying liability related to a period before induction; that issue was left for trial. Section 31(2) of the Partnership Act did not justify quashing on the admitted dates, since the act giving rise to the complaint occurred post-induction. The complaint was therefore permitted to proceed.

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Issues: Whether the complaint and proceedings under Section 138 of the Negotiable Instruments Act, 1881 were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the petitioners were inducted as partners after the alleged liability had arisen and, therefore, were protected by Section 31(2) of the Indian Partnership Act, 1932.

Analysis: The complaint was founded on issuance and dishonour of a cheque dated after the petitioners had been inducted as partners. In proceedings for quashing, the Court confined itself to whether a case for interference was made out and did not enter into the merits of the disputed liability. The question whether the underlying liability related to a period prior to induction was treated as a matter for trial. On the admitted dates, Section 31(2) of the Indian Partnership Act, 1932 did not furnish a basis for quashing because the act giving rise to the complaint was the post-induction issuance and dishonour of the cheque.

Conclusion: The petition for quashing was not maintainable on this ground and the complaint against the petitioners was allowed to proceed.

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