B.C. RAY, J.

(1) THIS is an appeal by special leave against the judgment of the Calcutta High court dated 7/06/1967 refusing to quash the process issued and the proceedings pending before the Additional Chief Presidency Magistrate, Calcutta under Section 406 of the Indian Penal Code.

(2) THE appellant and the respondent entered into a registered deed of partnership on 27/03/1963. The name of the partnership business was "Allied Engineers". The nature of the business was that if the tender submitted by the respondent to the Eastern Railways for extension of bridge No. 2 at the west end of Howrah yard, West Bengal was accepted by the Eastern Railways the said work would be deemed to be included within the partnership. Under the terms of partnership agreement the capital was Rs. 20,000.00 to be contributed equally by the partners within six months from the date of the agreement. The main office of the partnership was at 12/1/5 Monohar Pukur Road, Kalighat, Calcutta. Another term of the partnership was that if the tender was accepted the appellant would advance or lend from time to time a total sum of Rs. 20,000.00 towards the work represented by the tender as and when necessary. The amount so advanced would be repayable to the appellant with interest at six per cent per annum and 50% of the profit to be earned. The respondent was, under the terms of partnership agreement, to execute an irrevocable power of attorney in the manner and with powers as provided in the draft approved by the partners. The bankers of the firm would be United Bank of India Limited and all cheques on the said bank would be signed by both the partners. The agreement further provided that all cheques in respect of the work in the name of the respondent, S. K. Ghosh, in Eastern Railways would be drawn on the banking account operated by the partner Debabrata Gupta, namely, the appellant for which the respondent would execute an irrevocable power of attorney.

(3) THE case of the appellant is that he advanced to the partnership from time to time an aggregate sum of Rs. 50,000.00 for completion of the work. The respondent executed the power of attorney in favour of the appellant on 27/03/1963 and authorised the appellant to submit all bills, interim as well as final, to receive cheques and to do necessary things on behalf of the respondent in connection with the said work for extension of bridge under the partnership agreement.

(4) ON 18/04/1964 a second deed of partnership was made between the appellant and the respondent in modification of the earlier deed dated 27/03/1963. It was recited there that the appellant had invested to the extent of Rs. 50,000.00 for the aforesaid work of construction of the bridge. It was also recited in the agreement that the respondent was not in a position to contribute to his share of the capital. The second deed further provided that the amount contributed by the appellant "shall be repaid immediately after the collection of the bills from the Eastern Railways". The banking account was to be operated by the appellant and all bills collected and security refunded by the Eastern Railways in respect of the first agreement was to be deposited by the parties with the bank forthwith.

(5) IT appears that disputes arose between the appellant and the respondent whereupon the respondent wrote to the bank to stop all payments to the appellant. The respondent sent to the appellant a notice for dissolution of the partnership. The appellant in accordance with the partnership agreement instituted proceedings in the High court at Calcutta on or about 8/09/1965 for filing an arbitration agreement-under Section 20 of the Arbitration Act. The High court appointed an arbitrator for adjudication of disputes between the parties.

(6) MEANWHILE, summons was issued by the Chief Presidency Magistrate, Calcutta under S. 406 and 424/34 of the Indian Penal Code against the appellant. The respondent on 19/06/1965 ha