Cheque Dishonour Liability: where debt arose from a partnership, prosecution of an individual partner fails without firm impleadment or proof of personal debt.

Where cheque dishonour allegations derive from obligations of a partnership firm, the legal principle requires the firm to be the subject of the statutory demand and prosecution because firm liability is primary and partners' liability is derivative; absence of service or impleadment of the firm and lack of material proving a subsisting personal debt of the accused defeats conviction under the penal provision. The presumption of cheque issuance is rebuttable by evidence that the transaction was with the firm, and strict compliance with statutory conditions is required; consequence: conviction set aside for want of personal liability proof.

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Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 can be sustained where the alleged debt arose from a partnership firm, the firm was not impleaded or served with statutory notice, and the accused was proceeded against in his personal capacity.

Analysis: The statutory scheme requires that criminal liability for dishonour of a cheque under Section 138 arises only where the cheque is issued in discharge of a legally enforceable debt or liability. The architecture of Section 141, read with its explanation, treats a firm as a principal legal person whose liability must be prosecuted by arraigning the firm; liability of persons in charge is derivative. The evidence on record shows the complainant's transaction and alleged liability were with the partnership firm, and the firm was neither served with the demand notice nor impleaded as an accused. The presumption under the provision corresponding to Section 139 is rebuttable; an admission in the complainant's testimony that the transaction was with the firm raises a probable defence on the existence of personal liability of the accused. Successive presentations and notices were noted on the record but the primary issue is the absence of the firm before the forum and absence of material proving a subsisting personal liability of the accused. The penal nature of the offence mandates strict adherence to statutory conditions and proof of personal liability on the balance of probabilities.

Conclusion: The conviction cannot be sustained; the revisional application is allowed and the conviction under Section 138 of the Negotiable Instruments Act, 1881 is set aside in favour of the appellant.

Ratio Decidendi: Where the alleged liability arises from a partnership firm and the firm is not impleaded or served with the statutory demand, prosecution and conviction of an individual partner in his personal capacity for cheque dishonour is unsustainable absent proof that the cheque was issued to discharge a legally enforceable personal debt of that individual.

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