Supreme Court Clarifies: Partners Liable for Bounced Cheques Even If Firm Isn’t Named
The Supreme Court ruled that in cases under Section 138 of the Negotiable Instruments Act, a partnership firm need not be separately arraigned as an accused if its partners are prosecuted. The notice to partners constitutes notice to the firm, as partners are jointly and severally liable. The Court clarified that unlike companies, partnership firms lack a separate legal identity, making partners directly liable. The judgment distinguishes between vicarious liability (for companies) and joint liability (for firms), upholding the complaint’s validity despite the firm’s omission. The High Court’s order quashing the complaint was set aside.
Facts Of The Case:
The appellant, Dhansingh Prabhu, advanced a loan of ₹21 lakh to the respondents, Chandrasekar and another, who were partners of the fi...