Authority: High Court of Gujarat at Ahmedabad
Order Date: 21/07/2026
Case Overview
- Parties: Petitioner – Vaghela Parth Babulal; Respondents – State of Gujarat & others, including Original Complainant (Respondent No. 2) and Mayur Dineshbhai Mistri (Respondent No. 4).
- Nature of Proceeding: Criminal Miscellaneous Application under Section 482 of the Code of Criminal Procedure seeking quash and set‑aside of Criminal Case No. 489/2022 filed before the Judicial Magistrate First Class, Gandhinagar under Section 138 of the Negotiable Instruments Act.
- Background: Respondent No. 2 had extended a friendly loan of Rs 8,00,000 to the petitioner and Respondent No. 4 for business purposes. Respondent No. 4, a partner of the petitioner in the partnership firm Parth Enterprise (operating the café “Bar Eat & Drink”), issued a cheque (Cheque No. 000007) dated 18‑12‑2021 from Account No. 50200037711290 to repay the loan. The cheque was dishonoured, leading to the filing of Criminal Case No. 489/2022.
- Key Allegations: The petitioner was alleged to be liable for the dishonoured cheque despite claiming he was not a signatory and had ceased to be a partner of Parth Enterprise as of 28‑02‑2019.
- Petitioner’s Submissions:
- Not a signatory of the cheque.
- Resigned from the partnership on 28‑02‑2019, supported by a communication dated 28‑02‑2019 (Annexure B, p.15) and an affidavit‑cum‑declaration (p.18).
- Respondent No. 4 (Mayur Dineshbhai Mistri) acknowledged the resignation and agreed to be responsible for all future transactions, including cheques issued after the resignation.
- Respondent’s Submissions:
- The question of resignation should be decided by the trial court.
- A notice demanding payment was served on the petitioner, who did not respond, leading to the criminal case.
Court Findings
- The resignation of the petitioner from Parth Enterprise on 28‑02‑2019, accepted by Respondent No. 4, clearly removes any liability of the petitioner for cheques issued thereafter, including the cheque dated 18‑12‑2021 (Cheque No. 000007).
- The affidavit‑cum‑declaration dated 30‑06‑2022 further confirms Respondent No. 4’s acknowledgment of the petitioner’s resignation and responsibility for future transactions.
- Prima facie, the petitioner had no connection with the issuance of the cheque or with Parth Enterprise after his resignation; therefore, liability cannot be fastened on a resigned partner.
Final Outcome
- The petition is allowed. Criminal Case No. 489/2022 pending before the Judicial Magistrate First Class, Gandhinagar under Section 138 of the Negotiable Instruments Act, along with all consequential proceedings against the petitioner, is quashed and set aside.
- The rule is made absolute to the aforesaid extent.
Topics: Legal Judgment, Negotiable Instruments Act, Partnership Liability