TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Partners in a partnership firm jointly liable for dishonoured cheques</h1> <h3>R. Sumathi Versus Sri Balaji Yarns</h3> R. Sumathi Versus Sri Balaji Yarns - TMI Issues Involved:1. Sufficiency of averments to attract the offence under Section 138 of the Negotiable Instruments Act.2. Liability of a partner in a partnership firm for dishonoured cheques.3. Distinction between the roles and liabilities of directors in a company and partners in a partnership firm.Detailed Analysis:1. Sufficiency of Averments to Attract the Offence under Section 138 of the Negotiable Instruments ActThe primary contention raised by the petitioner’s counsel was that the averments in the complaint were insufficient to attract the offence under Section 138 of the NI Act. The petitioner argued that she did not sign the cheques and that mere presence during the signing of the cheques by her husband (A2) was not enough to hold her liable. The respondent’s counsel countered that the averments were sufficient to array the petitioner as an accused, emphasizing that these issues should be examined during the trial.2. Liability of a Partner in a Partnership Firm for Dishonoured ChequesThe court examined the provisions under Section 138 and Section 141 of the NI Act. Section 138 deals with the dishonour of cheques for insufficiency of funds, while Section 141 pertains to offences by companies and extends liability to individuals responsible for the conduct of the business. The court highlighted that a partner in a partnership firm holds a different position compared to a director in a company. A partner shares in both the profits and losses of the firm and is jointly responsible for ensuring that cheques issued by the firm are honoured. The court noted that the petitioner, being a partner, had a co-existing liability with her husband (A2) to ensure the cheques were honoured.3. Distinction Between the Roles and Liabilities of Directors in a Company and Partners in a Partnership FirmThe court elaborated on the distinction between directors in a company and partners in a partnership firm. Directors may have varying degrees of involvement and liability depending on their specific roles (e.g., whole-time director, managing director). In contrast, partners in a partnership firm are generally equally liable for the firm's transactions unless specified otherwise in the partnership deed. The court emphasized that in the absence of specific exclusions in the partnership deed, both partners (A2 and A3) are equally liable for the dishonoured cheques.ConclusionThe court concluded that the petitioner did not provide sufficient evidence to demonstrate that she had no direct interest in the partnership firm or that she would not share in the profits or losses. The court held that both partners are liable to answer any complaint regarding dishonoured cheques. The court dismissed the petitions, allowing the trial to proceed to examine the petitioner’s specific role and involvement in the firm’s transactions.Final OrderThe Criminal Original Petitions were dismissed, and the connected miscellaneous petitions were closed, allowing the trial to continue to determine the petitioner’s liability based on evidence presented during the trial.
TaxTMI 
TaxTMI 
