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This case pertains to the dishonor of cheques and the liability of the petitioners u/s 138 of the Negotiable Instruments Act. The High Court held that since the petitioners were neither partners of the partnership firm nor signatories to the instruments in question, initiating proceedings against them u/s 138 amounted to an abuse of the court process. The court emphasized that when a cheque is signed by an authorized signatory of a partnership firm, prosecution u/s 138 can only be instituted against those in charge and responsible for the firm's business conduct at the relevant time. Consequently, the High Court quashed the proceedings against the petitioners in the lower court.
This case pertains to the dishonor of cheques and the liability of the petitioners u/s 138 of the Negotiable Instruments Act. The High Court held that since the petitioners were neither partners of the partnership firm nor signatories to the instruments in question, initiating proceedings against them u/s 138 amounted to an abuse of the court process. The court emphasized that when a cheque is signed by an authorized signatory of a partnership firm, prosecution u/s 138 can only be instituted against those in charge and responsible for the firm's business conduct at the relevant time. Consequently, the High Court quashed the proceedings against the petitioners in the lower court.
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