150. (SC)
(Decided on: 14.07.2025)
A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 145 – Indian Partnership Act, 1932 (9 of 1932), Section 25 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 – Cheque bounce complaint – Non-impleadment of Partnership firm as accused – Maintainability of Complaint against Partner – Vicarious liability/ Joint and several – Since the liability is joint and several, even in the absence of a partnership firm being proceeded against by the complainant by issuance of legal notice as mandated u/s 138 of the Act or being made an accused specifically in a complaint filed under Section 200 of CrPC, (equivalent to Section 223 of the BNSS), such a complaint is maintainable.
(Para 7.21, 9.9)
B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 -- Cheque bounce complaint -- Offence by partnership firm – Partners personally, jointly and severally liable in the case of a partnership firm, when the offence has been proved against a partnership firm -- Partnership firm is only a compendious name for the partners of the firm, any offence committed u/s 138 read with Section 141 of the Act would make the partners of the firm jointly and severally liable with the firm.
(Para 9.10, 9.11)
C. Indian Partnership Act, 1932 (9 of 1932), Section 4, 5 -- Partnership firm – Whether a Separate Legal Personality -- A partnership firm, unlike a company registered under the Companies Act, does not possess a separate legal personality and the firm’s name is only a compendious reference for describing its partners -- This fundamental distinction between a firm and a company rests on the premise that the company is separate from its shareholders -- Even the registration of a firm does not mean that it becomes a distinct legal entity like a company -- Hence, the partners of a firm are co-owners of the property of the firm, unlike shareholders in a company who are not co-owners of the property of the company.
(Para 7.9, 7.10, 8)
D. Indian Partnership Act, 1932 (9 of 1932), Section 42 (c) -- Partnership firm and partners – Death of partner -- Perpetual Succession -- A partnership firm’s fundamental identity is contingent on the partners and undergoes a change with a change in partners, subject to contract -- Section 42(c) of the Partnership Act provides that subject to contract between the partners, a firm is dissolved by the death of a partner.
(Para 7.17)
E. Indian Partnership Act, 1932 (9 of 1932), Section 25, 26 -- Liability of Partners -- Liability of partners for the debts of the business is unlimited and they are jointly and severally liable for all business obligations of the partnership firm -- Any liability of a firm has the same effect of a liability against the partners -- Debt of the firm is the personal debt of a partner and the debt of the firm has to be incurred by each partner as a financial personal liability -- The liability of the firm for acts done by the partner would arise when such acts are done in the ordinary course of the business of the firm.
(Para 7.18-7.20, 7.22)
F. Indian Partnership Act, 1932 (9 of 1932), Section 25, 26 -- Liability of Partners – Penalty -- Since the firm by itself cannot transact any business, if a partner of the firm commits any breach, all the partners would become liable for the consequent penalties, just as the firm would be liable -- Further, if a penalty is imposed on a partnership firm for contravention of a statute, it amounts to levy of penalty on the partners also and there is no separate or independent penalty on the partners for the said contravention.
(Para 7.23)
G. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 145 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 – Cheque bounce complaint – Liability of Directors, manager, Secretary and other officer -- Director, manager, secretary or other officer of the company cannot be proceeded against per se by virtue of the position they hold in the company but can be proceeded against only when there is proof that the offence u/s 138 was committed by the company with their consent or connivance or due to negligence on their part -- Standard of proof is higher under sub-section (2) of Section 141 vis-à-vis the category of persons mentioned therein with regard to their specific role in the commission of the offence u/s 138 of the Act.
(Para 9.4)