The bar created by S. 69 of the Partnership Act does not apply to maintaining a criminal proceeding under S. 138 of the Negotiable Instruments Act.

( 1 ) M/s Sterling Novelty Products, Moradabad (U. P.) is a partnership firm of which Mrs. Jagdish Kaur W/o Gurbaksh Singh, Mrs. Jasleen Kaur W/o Arvinder Pal Singh and Master Uvraj Singh are the partners. The aforesaid firm is engaged in export business in handicrafts, brass wares, textiles and aluminimum items at Moradabad since 1992. International Gifts Ltd. is a company at Ontario, Canada and Gurcharan Singh, petitioner herein is the President of the said company. M/s Sterling Novelty Products through its partner Uvraj Singh represented by his natural guardian, Arvinder Pal Singh filed a complaint before the court of Chief Judicial Magistrate, Moradabad bearing case No. 852/9 of 1999 under S. 138 of Negotiable Instruments Act (hereinafter referred to as "the Act") and Secs. 406 and 420 I. P. C. arraying International Gifts Ltd. and its President Gurcharan Singh as accused.

( 2 ) THE case of the complainant, in short, is that the firm (M/s Sterling Novelty Products) supplied brass wares and textiles to the accused persons which were duly received by them. Towards payment thereof, they issued post dated cheques No. 001530 dt. 15-2-1999 of worth $ 85,959. 20 and No. 001531 dated 15-3-1999 of worth $ 84,208. 80 Canadian Dollar. Both the aforesaid cheques were issued by Gurcharan Singh, the petitioner as President of M/s International Gifts Ltd. The complainant presented the cheque No. 001530 dated 15-2-1999 with its banker Indian Overseas Bank, Moradabad and the same was sent to Bank of Monteral, Canada. The cheque was dishonoured and returned unpaid since the accused intimated his banker to stop payment. Similarly the other cheque No. 001531 dated 15-3-1999 which complainant deposited with its banker, Indian Overseas Bank, Moradabad was dishonoured on the very same ground. The complainant then served notice upon the accused as provided in the Act asking for payment of the amount covered under both the cheques within fifteen days of the date of receipt of the notice. As the accused failed to make payment, the present complaint was filed. However, after filing of the complaint the amount covered under cheque No. 001530 was paid. The learned Magistrate after recording the statement of the complainant and having gone through the relevant materials and documents was satisfied that prima-facie offence under S. 138 of the Act and S. 420 I. P. C. was made out against the accused persons and accordingly, took cognizance of the said offence and issued process to the accused Gurcharan Singh, President of the International Gifts Ltd. for appearance. Challenging the order of the Magistrate taking cognizance of the offence, the accused has filed the present case seeking quashing of the criminal proceeding inter-alia on the ground that the notice issued after bouncing of cheques is bad in law and that the complaint is barred by limitation as provided in S. 142 of the Act. Admitting that the cheques were dishonoured by his banker on his intimation, the accused has urged that he was compelled to take such steps since the goods supplied by complainants firm were sub-standard and therefore, in view of the nature of the dispute he cannot be imputed with any criminal liability.

( 3 ) THE complainant on being noticed filed return refuting the allegation that the goods supplied by it were sub-standard. It is urged that when the cheques were returned unpaid by the Bank of Monteral, correspondence was made with the accused to explain the reason of the return of the cheques. He responded to complainants letter, but did not take such plea that payment was stopped as the goods supplied were sub-standard. As regards the validity of the notice and period of limitation for filing complaint, his case is that on being informed by its banker, Indian Overseas Bank on 23-4-1999 regarding dishonour of the cheques, he sent notice on 6-5-1999 to the accused calling upon him to pay the amount of the cheques and the same was acknowledged on 10-5-1999.