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TMI Blog2014 (10) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... all the partners, as opined by this Court. To put it differently, a Firm does not have any existence away from its partners. Each partner shall be liable as if the 'Debt of the firm has been incurred on its personal liability - The obligation of the Respondent / Accused that at the time of the offence was committed he was not incharge and was not responsible to the Firm for the conduct of the business of the Firm wold arise only when firstly the Appellant / Complainant make proper and necessary averments in the complaint and establishes that fact. As a matter of fact, the mere writing or filing of an acknowledge of the debt by one partner does not necessarily of itself bind its co-partner unless he had Authority, express or imply to do so. Furthermore, the proof of authority from other partner is quite essential and necessary and cannot be presumed. Also that after dissolution, however, express authority must be proved. A partner will have no imply authority to bind the firm unless it can be shown that giving of guarantees is necessary for carrying on the business of the firm in ordinary fashion. When an Negotiable Instrument is regularly drawn by a partner in a trading Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid case, the Appellant / Complainant had not arrayed 'Sri Karpaga Vinayagar Jewellery' as first Accused and although presently 'Sri Karpaga Vinayagar Jewellery' was not in existence, in regard to this there was no pleading in the complaint by the Appellant and as per Section 141(1)(2) of the Negotiable Instruments Act, the Appellant / Complainant had filed the present case only against the Respondent / Accused and as such, the case filed by the Appellant / Complainant is not maintainable and resultantly held that the Appellant / Complainant had not proved the case beyond reasonable doubts to the effect that the Respondent / Accused was guilty under Section 138 of Negotiable Instruments Act and thereby granted the benefit of doubt in favour of the Respondent / Accused and consequently, he was found not guilty and acquitted him under Section 255(1) of Cr.P.C.' 3. According to the Learned Counsel for the Appellant / Complainant, the Judgment of the trial Court in C.C.No.1273 of 2003 is not only against the probability of the case but the same is also devoid of merits. 4. The Learned Counsel for the Appellant / Complainant urges before this Court that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r signed only as a partner and that therefore, it must be taken to mean that he issued the Cheques only on behalf of the firm. This argument does not appeal to me, since there is no material to show that the firm purchased silk from the complainant on credit basis. Moreover, it is pointed out by the lower appellate court that the counsel for the petitioner stated before the court that 'V.S. Silk Centre' in which the petitioner is alleged to be a partner, was not a registered one. Whatever it is unless it is established that the firm alone is liable to discharge the liability, the complainant cannot be compelled to add the firm as an accused. 11. The Learned counsel for the Appellant cites the decision of the Hon'ble Supreme Court in R.Rajagopal v S.S.Venkat reported in (2001) 10 SCC 91 wherein, it is observed and held as under:- 2. The only ground on which the complaint filed by the petitioner against the respondent for the offence under Section 138 of. the Negotiable Instruments Act has been quashed by the High Court is that the Company (the partnership firm in this case) on whose behalf the cheque was issued was not made an accused in the complaint. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attracted to a corporation and company and it is so luminescent from the language employed under Section 141 of the Act. The present enactment is one where the company itself and certain categories of officers in certain circumstances are deemed to be guilty of the offence. The company can have criminal liability fastened on it, and if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. Section 141 of the Act clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offences under Section 138. Thus, the statutory intendment is absolutely plain. The provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification. It is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term deemed (used in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix lakhs and he deposited the said cheque at UTI Bank, Mylapore Branch on 27.12.2002 and the said cheque was returned based on the reason 'for want of sufficient funds' and he was informed about the return of Cheque on 03.01.2003 and the Memo was Ex.P2 and the Debit Advice was Ex.P3 and that was issued Ex.P4 Lawyer's Notice, dated 07.01.2003 to the Respondent / Accused and the said notice was sent to the Respondent / Accused village address and also to the Chennai address in two registered tapals and they returned the cover from Tiruvarur address was Ex.P5 and the returned cover sent to Chennai address with an endorsement of 'refused to receive the same' was Ex.P6 and subsequently, till date, since the Respondent / Accused had not paid either the money or given any reply, he had filed the case for appropriate action. 18. P.W.1 in his cross-examination had deposed that in Ex.P:7 (Respondent's Statement of Account) the Respondent / Accused Ganesan's name was not there and it was in the name of 'Sri Karpaga Vinayagar Jewellery' and further stated that he does not know as to whether the Respondent / Accused had issued the Cheque affixing his signa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice also presumed to be known. 22. It may not be out of place by this Court to relevantly point out that in Ex.P4 Lawyer's Notice, dated 07.01.2013, issued on behalf of the Appellant / Complainant addressed to the Respondent / Accused to the addresses at Tiruvarur and Kilpauk, Chennai-10. It was mentioned that the Respondent / Accused approached the Appellant / Complainant in the month of January 2002 for sanction of hand loan for a sum of Rs.6,00,000/- to improve his business in Jewellery and under the Appellant / Complainant in order to help the Respondent / Accused to develop the business collected the said sum from his friends and handed over the same on 10.01.2002 etc., 23. A perusal of Ex.P6 Registered Post Returned Cover addressed to the Respondent / Accused shows that it was refused to be received at Kilpauk, Chennai 10 address and there was an endorsement made to that effect by the concerned postal authority. 24. A perusal of Ex.P5 Registered Post returned cover shows that it was not received by the Respondent/Accused at Tiruvarur Address and was redirected to the address of the Appellant / Complainant Lawyer at Chennai-42 25. It is to be pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court. Every partner is in contemplation of the law the general and accredited agent of the partnership, or as it is some times expressed each partner is praepositus Negotiis Societaties, and may resultantly bind all the other partners by his acts in all matters which are within the ambit and objects of the partnership. The usual authority of a partner in a trading partnership also enables him to receive, and give receipts for 'Debts', due to the Firm, employ staff members for the Firm and retain an Advocate to conduct proceedings for recovering 'Debts' due to the Firm. Although a partner may do an act on behalf of the Firm, which he is not authorised to do it is always open to the other partners to ratify his act. But they should ratify the entire transaction or disclaim the old transaction and cannot ratify a part of the transaction, which best serves their interests and repudiate the remainder. 29. As per Section 25 of the Indian Partnership Act, 1932 every partner is liable, jointly with all other partners and also severally for all acts of the Firm done while is a partner. Admittedly, a Firm is not a legal entity. It is only a collective or compendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, where the partnership agreement spoke of raising of loan by the firm, then the managing partner have every rights to borrow of money for the purpose of the Firm. However, a Firm will be bound under the Negotiable Instruments Act only a partner of 'acts' in the name of the Firm. It is essential that Negotiable Instruments must in order to bind the firm be made in the name of the firm as per decision M M Abbas Brothers and Others v Chetandas Fatehchans and Another reported in AIR 1979 Mad 272, at pages 275 and 276 where Negotiable Instruments has been drawn by a partner in his own name, other partners are not liable on the Instruments in the absence of evidence that it was made for and on behalf of the firm, as per decision Sitaram Krishna v Chimandas (1928) 52 Bom 640. A partner cannot without the consent and knowledge of other partner enter into a contract with itself so as to bind the firm as per the decision Sunderdas v Liberty Pictures reported in AIR 1956 Bom 618. 32. It is to be remembered that Section 24 of the Indian Partnership Act, 1932 is based on the principle that as a partner stand as an agent in relation to the firm, a notice to the 'Agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 2002 for sanction of hand loan for a sum of rupees six lakhs to improve his business in jewellery and further only to help the Respondent / Accused to develop his business, he arranged the said sum of rupees six lakhs from his friends and handed over the same to him on 10.01.2002. Therefore, from the aforesaid averments it is crystal clear that the Appellant / Complainant had lent the sum of rupees six lakhs in his private money transaction with the Respondent / Accused and in view of the fact that the Respondent / Accused was admittedly a partner in the 'Sri Karpaga Vinayagar Jewellery' partnership firm, as stated in paragraph 3 of the complaint in C.C.No.1273 of 2003 on the file of trial Court and also this Court taking note of the fact that the said Jewellery firm was not shown as partner along with other partners, if any, this Court is of the considered view that the Appellant / Complainant had only filed the complaint in C.C.No.1273 of 2003 on the file of the trial Court only against the Respondent / Accused in his individual capacity and as such, in the absence of principal offender viz., 'Sri Karpaga Vinayagar Jewellery' Firm was not shown as one of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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