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Issues:
Challenging criminal proceedings under Section 482, Cr.P.C. for alleged offences under Sections 120B, 420, 406, and 468 IPC based on partnership liability and criminal liability of partners. Detailed Analysis: 1. Partnership Status and Liability: The petitioners, accused 3, 4, and 5, contested their liability in a criminal case involving fraud and cheating. The complaint alleged that despite not being involved in the day-to-day business of the firm, they were partners when the complainant deposited funds. The petitioners argued that they had ceased to be partners as of 22-10-1988, supported by documents showing a new partnership formed on that date. The court emphasized that under the Indian Partnership Act, a firm is not a legal entity but an association of individuals, each liable for the firm's acts. However, criminal liability is not automatically imposed on all partners but on those in charge of the business at the time of the alleged offence. 2. Vicarious Liability and Criminal Offences: The judgment highlighted the absence of vicarious liability in criminal law unless expressly provided by statute. It clarified that partners not actively involved in the firm's operations, often referred to as sleeping partners, should not be prosecuted for offences they were unaware of or not responsible for. The court cited a Supreme Court case to support its stance that prosecuting all partners without evidence of involvement would be unjust. 3. Abuse of Process and Quashing of Proceedings: The court found that the complaint lacked specific allegations against the petitioners, failed to attribute overt acts to them, and did not detail the forged documents. Moreover, the complaint primarily indicated civil liability rather than criminal liability. Consequently, the court deemed the criminal proceedings an abuse of process, leading to the quashing of the case against the petitioners under Section 482 of the Criminal Procedure Code. In conclusion, the judgment focused on the partners' legal status, the distinction between civil and criminal liability, and the necessity of establishing individual culpability in criminal cases. It underscored the importance of evidence linking partners to alleged offences and cautioned against prosecuting partners without proper involvement or knowledge of the crimes.
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