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Returned cheque: Unregistered partnership firms can file case

In  MURJIBHAI VISHRAM VARSANI Vs SALEMAMAD JUMA SAMEJA, the Gujarat High Court has ruled that an unregistered partnership firm can file a criminal complaint for a dishonoured cheque under section 138 of the Negotiable Instruments Act.

The HC clarified this position while dealing with three cases involving a similar issue. This was because various high courts had passed contrary orders. The issue was whether section 69(2) of the Partnership Act bars an unregistered firm from lodging such a criminal complaint.

Citing orders passed by various high courts and the Supreme Court, Justice J B Pardiwala concluded that section 69(2) of the Act does not prohibit an unregistered partnership firm from filing a criminal complaint. "The said section has no application to criminal cases. Under these circumstances it could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Non-registration of the firm has no legal bearing on the criminal case," the HC observed.

There were three such petitions before the HC, demanding quashing criminal cases for returned cheques. The accused were under impression that complaints by unregistered firms are not maintainable, and they did not even bother to cross-examine the witnesses.

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