Section 69(2) of Indian Partnership Act, 1932 does not bar filing of a suit based on dishonour of a cheque

The Delhi High Court held that a dishonour of cheque is a cause of action which does not arise from a contract between the parties and therefore the bar under Section 69(2) of Indian Partnership Act, 1932 would not be attracted.

The above was held by the Delhi High Court in the matter of M/s. Hindustan Infrastructure Construction Corporation Limited & Anr. Vs. M/s. R.S. Woods International & Ors., C.R.P. No.19/2018 decided on 13.12.2018.


The respondents/plaintiff, an unregistered partnership firm, filed a civil suit for recovery against the petitioners/defendant on account of dishonour of cheques.

The petitioners/defendants Nos.2 & 3 filed an application under Order VII Rule 11 CPC for rejection of the plaint on the ground that the suit is barred under Section 69 (2) of the Indian Partnership Act, 1932. It was contended by the Petitioners that non-registration of a partnership firm bars filing of a suit by or on behalf of such firm to enforce a right arising from a contract by or on behalf of such firm against any third party.

The said application came to be dismissed. Hence, a revision petition was preferred by the aggrieved party, before the High Court.


Referring to the judgment of Afsal Baker Vs. Maya Printers 2016 SCC OnLine Ker 29914, the Court held that in the facts of the case, the Respondent is seeking enforcement of the liability of the petitioners created under Section 30 and 37 of the Negotiable Instruments Act, 1881 as the cause of action for the plaint is based on the dishonour of the said cheques. Since, the suit is not based on any contract between the parties, the bar under Section 69 (2) of the Act would not apply.