The Karnataka High Court.
Credit: DH File Photo
Bengaluru: Retiring partners of a company cannot be included in legal proceedings unless there is a specific claim of their involvement and continued liability, the Karnataka High Court recently ruled.
Justice M Nagaprasanna made this observation while quashing proceedings against former partners of RR Infocom in a cheque bounce case.
The case originated from a complaint by Inflow Technologies, stating that RR Infocom had placed purchase orders with payment due between September and November 2020. Petitioners Jai Agarwal and Anjana Agarwal retired from RR Infocom on October 11, 2021. Later, between November 30 and December 5, 2022, three cheques totalling Rs 3.27 crore were issued by current partner Renu J Nair to Inflow Technologies, which subsequently bounced due to insufficient funds.
Inflow Technologies filed a complaint against four people, including the retired partners. The Agarwals contested the proceedings, noting that they had left the partnership over a year before the cheques were issued.
In response, the complainant argued that the question of their retirement should be settled in trial.
Justice Nagaprasanna pointed out that the cheques were not signed by the petitioners, who had retired over a year before the issuance.
"As the petitioners had retired as partners one year before the issuance of the cheque, and there is no averment in the complaint about the involvement of these petitioners even after retirement. In the teeth of the aforesaid facts, permitting further proceedings against these petitioners would become an abuse of the process of law and result in miscarriage of justice," the court said.