You took a cheque from a partner of a firm, it bounced, and your lawyer says the complaint is weak because you never named the firm itself. Can you still prosecute the partners under Section 138 of the Negotiable Instruments Act 1881? On 14 July 2025 the Supreme Court answered yes, you can, as long as the demand notice reached the partners.
Short answer: In Dhanasingh Prabhu v. Chandrasekar, 2025 INSC 831, the Supreme Court held that a Section 138 complaint against partners stays alive even if the partnership firm is not separately made an accused. A notice served on the partners is treated as notice to the firm. Partners of a firm are directly and jointly liable, because a firm is not a separate legal person the way a company is.
If you are short on time, jump to the section on who can be held liable and then the steps to send a valid Section 138 notice.
For years, defence lawyers borrowed an argument from company law. They pointed to Aneeta Hada v. Godfather Travels & Tours (P) Ltd, 2012, where the Supreme Court ruled that you generally cannot prosecute a company's directors under Section 141 unless the company itself is arraigned (named) as an accused. The director's liability is vicarious, so the company must be on record first. Partners began copying this defence, and many High Courts quashed complaints where only the partners, not the firm, were named.
The Supreme Court has now drawn a clear line. A company under the Companies Act is a separate legal person, distinct from its directors. A partnership firm under the Indian Partnership Act 1932 is not; the firm name is only a label for the partners who run it. So the Aneeta Hada rule does not transfer to firms. The Court distinguished Aneeta Hada; it did not overrule it.
A careful note: Section 141 still applies to firms. It fixes liability on the person who was in charge of and responsible for the conduct of the firm's business at the relevant time. Section 138 itself makes dishonour of a cheque for insufficient funds a criminal offence, but only after a valid demand notice and failure to pay. So this ruling makes it easier to proceed against partners without naming the firm; it does not remove the need to show a partner's responsibility where that is disputed.
When in doubt, name both the firm and the responsible partners. This ruling removes a technical defence; it does not punish you for being thorough.
A weak notice sinks the whole case. Follow these steps.
Need a structured walkthrough first? See our guide on the cheque bounce notice and complaint process, and the step companion on how to file a cheque bounce case in 2026. For wider rights-enforcement strategy, The RTI Playbook is a useful read.
In Dhanasingh Prabhu v. Chandrasekar, decided on 14 July 2025, a lender advanced Rs 21 lakh to two partners of Mouriya Coirs. The repayment cheque, drawn on the firm's account, bounced on 2 February 2021. The lender served the demand notice on the partners and filed under Section 138 without naming the firm. The High Court quashed the complaint, holding the firm should have been arraigned. The Supreme Court bench of Justice B.V. Nagarathna and Justice Satish Chandra Sharma reversed that, restored the complaint, and confirmed the partners can be tried even though the firm was never named.
Yes. The Supreme Court in Dhanasingh Prabhu v. Chandrasekar, 2025 INSC 831, held that a Section 138 complaint against partners is maintainable even when the firm is not made an accused. A partnership firm is not a separate legal person, so the partners are directly liable. Naming the firm is still a safe practice, but it is no longer compulsory for the case to survive.
No. The Court distinguished Aneeta Hada; it did not overrule it. Aneeta Hada deals with companies, where a director's liability is vicarious, so the company must usually be arraigned. A firm is different. It has no separate legal personality from its partners, so that company-law rule does not apply to partnership cheque bounce cases.
The Court held that notice to the partners is construed as notice to the firm. So serving the partners is enough to satisfy the demand-notice requirement. If you have the firm's address as well, sending a copy there is good caution, but failing to do so does not defeat your complaint.
Not automatically. The partner who signed is directly liable. Other partners are liable under Section 141 only if they were in charge of and responsible for the firm's business at the relevant time. A partner with no role in running the business can defend the case by proving they had no part in its conduct and no knowledge of the offence.
Present the cheque within 3 months of its date. After dishonour, send the demand notice within 30 days of the bank return memo. The drawer gets 15 days to pay. If unpaid, file within 30 days after that window. On conviction the offence carries up to 2 years jail, a fine up to twice the cheque amount, or both.
Reviewed by Dr. Shrawan Kumar Pathak. Last reviewed: June 2026. This article is general information, not legal advice. For your specific case, consult a lawyer.