where a negotiable instrument has been drawn by a partner in his own name, the other partners are not liable on the instrument in the absence of evidence that it was made for and on behalf of the firm

 As per Section 18 of the Indian Partnership Act, 1932, the act of the partner of the firm can well be construed as an act on behalf of all the partners if the circumstances warrant such a conclusion. Also that, an every partner in a trading firm has implied authority to borrow money for the purposes of the business or credit of the firm. However, where a negotiable instrument has been drawn by a partner in his own name, the other partners are not liable on the instrument in the absence of evidence that it was made for and on behalf of the firm as per decision Harbhogwandas V. Narayana AIR 1952 Mys 116.

57. Section 22 of the Indian Partnership Act, 1932, enjoins that in order to bind a firm, by an act or an instrument executed by a partner on behalf of the firm, the act should be done or the instrument should be executed in the name of the firm, or in any other manner expressing or implying an intention to bind the firm as per decision of the Hon'ble Supreme Court Devji V. Magan Lal R. Atharana MANU/SC/0020/1964 : AIR 1965 SC 139 and 140.

58. Furthermore, in a case where after the dissolution of the firm the partner taking over the business signed the invoices for the goods sent to an old customer as the proprietor by scoring out the word 'Partner' it was held that the other members of the dissolved firm were not liable for such subsequent transactions as per decision H. Manjunatha Nayak V. Ullal Dayananda Nayak MANU/KA/0183/1984 : AIR 1984 Kant. 55, P.59.

59. At this stage, this Court aptly points out the decision of the Hon'ble Supreme Court Monaben Ketanbhai shah V. State of Gujarat MANU/SC/0596/2004 : (2004) 7 SCC 15, wherein it is held that the primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. It is to be remembered for saddling the criminal liability, there is no presumption that every partner known about the transaction.

60. In fact, the obligation of the partners to establish that at the time the offence was committed they were not in charge of and were not responsible to the firm for the conduct of the business of the firm, would come into operative play only when at first the complainant makes necessary averments/allegations in the complaint and establishes that fact.

Equivalent Citation: 2015ALLMR(Cri)JOURNAL260, I(2015)BC308(Mad.), 2014(5)CTC808, 2014(4)MLJ(Crl)225

IN THE HIGH COURT OF MADRAS

Crl. A. No. 679 of 2009

Decided On: 14.08.2014

Appellants: C. Ponnusamy
Vs.
Respondent: Chinnamman Constructions

Hon'ble Judges/Coram:M. Venugopal, J.