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new partners cannot be held guilty for cheque issued by old

Assistant law officer

New partners cannot be held guilty for cheque issued by old partners – SC

Sarojben Ashwinkumar Shah etc. Vs. State of Gujarat & ANR. (SC) – In this case, a firm issued cheques to a person but it was returned by the bank as the account had been closed. The payee filed a criminal complaint under Section 138 of the Negotiable Instruments Act against the firm and two partners. During the trial, the two partners produced the copy of the registration of the firm. It indicated that there were two more partners in the firm. So the payee wanted to make them also parties. The newcomers moved the Gujarat high court for quashing this move. The high court refused to do so. They appealed to the Supreme Court. It set aside the high court order and asked it to reconsider the case.

Judgment attached.

 
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IT IS OLD CONCEPT THAT A PARTNER IS NOT LIABLE FOR THE LIABILITY BEFORE HE WAS PARTNER

 
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POWER OF DEFENSE IS IMMENSE

For firms vicarious liabilities has to be alleged in pleadings with facts and circumstances to new partners are not liable for criminal action.

 
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