Legal Question in Criminal Law in India

u/s 138 n.i act

suppose a partner has taken a loan in the name of the firm,and credited the said amount to his capital account in the books of accounts of the firm and while repaying the amount,made a payment from the firm,being the amount debited to his capital account.If the cheques get dishonoured on any account,who is to be held liable, a firm,all the partners or only that partner whoes account is been credited and debited.


Asked on 5/02/07, 1:46 am

5 Answers from Attorneys

Re: u/s 138 n.i act

All the partners.Internal matter does not effect the right of outsider.

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Answered on 5/02/07, 1:04 pm
G. M. Gupta gmguptaandassociates

Re: u/s 138 n.i act

it seems that he has used the name of firm and has dealt on behalf of the firm

in these circumstances it seems that the firm will be liable for his acts.

for better advice meet with all papers

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Answered on 5/02/07, 3:03 pm
Sarosh Bastawala ADVOCATE - SUPREME COURT OF INDIA

Re: u/s 138 n.i act

In an act has been done in the name of the firm then the partnership is liable and all other matters is a matter of internal management with which outsiders are not concerned.

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Answered on 5/02/07, 1:51 am
Shrichand Nahar S.V.Nahar, Advocate

Re: u/s 138 n.i act

The payee of cheque can initiate prosecution against the firm and its partners. However, you can effectively defend the same - (i) If the payee of cheque has accepted the cheque towards discharge of personal debt/liability of the partner who borrowed funds from him/her and (ii) if as per the books of accounts of payee and firm as also other evidence in this behalf, it can be proved that there is no debt or liability towards the payee of cheque.

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Answered on 5/02/07, 3:39 am
Vishwa Arya Arya & Co.

Re: u/s 138 n.i act

since the loan was raised in the name of firm, surely the firm and its all partners are liable. Merely the cheque was credited to the capital of an individual partner does not change the scene

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Answered on 5/05/07, 3:25 pm


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