Dishonour of cheque — When cheque is issued by partnership firm from its bank account, the cheque is said to be issued by all partners — Partnership Act, 1932 S. 18.

[Mukesh Raoji Navadhare v. Ajit Bhaskar Kasbekar & Anr.,
AIR 2010 (NOC) 817 (Bom.); 2010 (3) AIR Bom. R 195]

The petitioner and the complainant were carrying on
business in partnership in the name and style of M/s. Shantakrupa Corporation.
The firm issued a cheque to the complaintant. The cheque was signed on behalf
of the firm by the petitioner as its partner. The cheque was dishonoured.
Pursuant thereto a complaint u/s.138 of the Negotiable Instrument Act was
filed but the firm was not joined as a party. The issue arose whether such a
complaint was maintainable.

The Court held that a partnership firm is not a body
corporate. S. 4 of the Partnership Act defines ‘partnership’ as relation
between the persons who have agreed to share profit of a business carried on
by all or any of them acting for all. The persons who have entered into a
partnership with one another are called individually as partners and
collectively ‘a firm’. The name under which the business is carried on is the
firm name. The firm name is merely a compendious name given to group of
persons who have agreed to carry on business in partnership.

In this case, the cheque was drawn from an account in a
bank maintained in the name of the firm. It bears the rubber stamp of the firm
and the petitioner had signed it as a partner of the firm. In law, when a
cheque is issued by the firm and from an account maintained by the firm, the
cheque is issued by all the partners and one of the partners merely signs it
as an agent of the firm i.e., agent of all partners. The complainant
who is a partner of the firm would, therefore, be regarded as one of the
drawers being a part of the firm. Thus, the complainant is co-drawer as well
as payee of the cheque. He, therefore, cannot prosecute himself or other
partner u/s.138 of the Act. The position may be different when a firm issues a
cheque not to its own partner but to a third person. There, the firm would be
liable as also the partners subject, of course, to the provisions of S. 141 of
the Act and in particular Expl. (b) thereto.