#Partner Liability

The Kerala High Court granted pre-arrest bail to three senior citizen partners in a deposit scheme case, holding that mere partnership in a firm does not equate to criminal liability without evidence of active involvement or intent. This ruling reinforces that liability under the Banning of Unregulated Deposit Schemes Act must be individually proven, protecting innocent associates from indiscriminate arrest.

The Madhya Pradesh High Court ruled that a partner who retires from a firm remains liable under Section 138 of the Negotiable Instruments Act for cheques issued by the firm during their partnership tenure, pending evidence of liability discharge. This holding reinforces vicarious liability principles in partnership disputes, impacting retired partners facing cheque bounce prosecutions.

Kerala High Court upholds conviction under Section 138 NI Act, holding partners liable for dishonoured cheques issued by their firm. Key principles on vicarious liability and evidentiary standards clarified.