Partners of a firm can be individually prosecuted for cheque dishonour despite the firm's acquittal, as the firm lacks separate legal identity.

ORDER

The Criminal Revision Case is filed by the petitioner/A2 challenging the Judgment dated 04.08.2023 in Crl.A.No.85 of 2022 on the file of the learned Principal Judge, Tiruppur, thereby confirming the Judgment dated 24.06.2022 in STC No.2072 of 2017 on the file of the learned Judicial Magistrate, Palladam, convicting the petitioner for the offence under Section 138 of the Negotiable Instruments Act [in short, 'the NI Act'] and sentenced him to undergo 11 months simple imprisonment and to pay twice the cheque amount to the complainant as compensation, in default to undergo three months simple imprisonment

2. It is the case of the respondent that the petitioner is a partner in a firm, which is arrayed as A1 in the complaint filed by the respondent; that the partnership firm was due to pay a sum of Rs.48,97,397/- towards five invoices raised by the respondent; that towards the discharge of the liability, a cheque dated 25.05.2017 drawn in favour of the respondent was issued from the firm's account and signed by the petitioner for a sum of Rs.47 Lakhs; that the said cheque was presented for collection on 10.07.2017 and it was returned for the reason 'Payment stopped by the drawer'; that statutory notice was issued on 24.07.2017; that inspite of receipt of notice, the firm did not make the payment and had sent a reply notice with false averments and thus, the firm committed the offences under Section 138 of the Negotiable Instruments Act; and that the petitioner is the Managing Partner of the said firm and the 3^rd accused was a partner of the said firm.

3. Before the trial Court, the respondent had examined himself as PW1 and marked 14 documents as Ex.P1 to Ex.P14. The trial Court had acquitted the firm which was arrayed as A1 and the other partner arrayed as A3 and convicted the petitioner/A2 stating that the respondent had proved the case against the petitioner and sentenced him a stated above. The appellate Court confirmed the said finding of guilt and sentence imposed by the trial Court.

4. The learned counsel for the petitioner would submit that admittedly the cheque was issued by the firm; that the trial Court having acquitted the firm of the offence under Section 138 of the NI Act, ought not to have convicted the partner alone and that the said approach of the learned Magistrate is opposed to settled position of law; that the petitioner had rebutted the statutory presumption in the cross- examination; and that therefore, the finding of guilt of the trial Court as confirmed by the appellate Court is liable to be set aside.

5. (i) The learned counsel for the respondent per contra submitted that the Hon'ble Supreme Court in a recent decision in Dhanasingh Prabhu v. Chandrasekar and another, reported in 2025(10) SCC 96 held that even if the firm is not made an accused, the partners can be prosecuted under Section 138 of the NI Act, as the partnership firm is not a legal entity separate and distinct as a company from its Directors and the partnership firm has no separate recognition and that in case of a partnership firm, the offence is committed by the partners of the firm and not just the firm per se. The learned counsel therefore submitted that notwithstanding the acquittal of the firm, the petitioner as the partner of the firm can still be convicted and prayed for dismissal of the revision.

(ii) The learned counsel for the respondent also submitted that the respondent has now challenged the judgment of acquittal in respect of the firm/A1 and the other partner/A3 and therefore, the prayer for acquittal of the petitioner/A2 on the ground that the firm has been acquitted, cannot be