Date of reserved for orders : - Date of pronouncement : 30.09.2026 Date of uploading : 30.09-2026 APHC010629582022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3604] WEDNESDAY, THE 30TH DAY OF SEPTEMBER 2026 PRESENT THE HONOURABLE SMT JUSTICE SUNITHA GANDHAM CRIMINAL PETITION NO: 9230/2022 Between: 1. Y V RAGHUNANDAN,, S/O Y.C. RAO, HINDU AGED ABOUT 52 YEARS, OCCU. MANAGING PARTNER, SRI VENKATESWARA INFRA, R/O D NO 6- 3-596/63/8, NAVEEN NAGAR, HYDERABAD -500004. ...PETITIONER/ACCUSED AND 1. THE STATE OF ANDHRA PRADESH, REP BY ITS PUBLIC PROSECUTOR, HIGH COURT OF ANDHRA PRADESH AMARAVATHI. 2. UPPULURI RAJYA LAKSHMI, W/O MURALI KRISHNA, HINDU AGED ABOUT 40 YEARS, OCCU. BUSINESS, R/O FLAT NO 502, J.M.D LORDS APARTMENTS, BHARATHI NAGAR, 7TH CROSS ROADS. VIJAYWADA - 520008 ...RESPONDENT/COMPLAINANT(S): Petition under Sections 437, 438, 439 and 482 of the Code of Criminal Procedure, 1973 and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, praying that, in the circumstances stated in the Memorandum of Grounds of Criminal Petition, this Hon‟ble Court may be pleased to quash C.C.No.135 of 2023 on the file of the V Additional Chief Metropolitan Magistrate, Vijayawada, Krishna District, in the interest of justice, and further record that C.C.No.1842 of 2022 on the file of the IV Additional Chief Metropolitan Magistrate, Vijayawada, stands amended as C.C.No.135 of 2023 on the file of the V Additional Chief Metropolitan Magistrate, Vijayawada, pursuant to the order dated 17.08.2026 in I.A.No.1 of 2025 in Crl.P.No.9230 of 2022. IA NO: 1 OF 2022 2 SUN, J Crlp_9230_2022 Petition under Section 482 of the Code of Criminal Procedure, 1973 and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, praying that, in the circumstances stated in the Memorandum of Grounds of Criminal Petition, this Hon‟ble Court may be pleased to stay all further proceedings in C.C.No.1842 of 2022 on the file of the IV Additional Chief Metropolitan Magistrate, Vijayawada, Krishna District, including the appearance of the petitioner, pending disposal of the Criminal Petition before this Hon‟ble Court. IA NO: 1 OF 2025 Petition under Section 482 of the Code of Criminal Procedure, 1973 and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, praying that, in the circumstances stated in the Memorandum of Grounds of Criminal Petition, this Hon‟ble Court may be pleased to permit the petitioner to make the following amendment in the quash petition: (a) to delete “C.C.No.1842 of 2022 on the file of the Hon‟ble Court of the IV Additional Chief Metropolitan Magistrate, Vijayawada” wherever it occurs in the quash petition and to substitute “C.C.No.135 of 2023 on the file of the Hon‟ble Court of the V Additional Chief Metropolitan Magistrate, Vijayawada” in its place. IA NO: 2 OF 2025 Petition under Section 482 of the Code of Criminal Procedure, 1973 and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, praying that, in the circumstances stated in the Memorandum of Grounds of Criminal Petition, this Hon‟ble Court may be pleased to extend the interim order dated 21.11.2022 passed in Crl.P.No.9230 of 2022, in the interest of justice. Counsel for the Petitioner/Accused: 1. CH B R P SEKHAR Counsel for Respondent No.2/Complainant: 1. PUBLIC PROSECUTOR (AP) 2. CHALASANI AJAY KUMAR The Court made the following: 3 SUN, J Crlp_9230_2022 THE HONOURABLE SMT JUSTICE SUNITHA GANDHAM CRIMINAL PETITION NO: 9230/2022 ORDER: This Criminal Petition is filed by the petitioner/Accused under Section 482 of the Code of Criminal Procedure, 1973 and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking to quash the proceedings against him in C.C.No.135 of 2023 on the file of the V Additional Chief Metropolitan Magistrate, Vijayawada, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for brevity, „the Act‟). 2. The case of the petitioner is that he is a partner of Sri Venkateswara Infra, Vijayawada, and that the said firm has not been arrayed as an accused in the complaint filed by Respondent No.2. Therefore, according to the petitioner, the complaint is not maintainable. Learned counsel for the petitioner, relying upon the judgments of the Hon‟ble Supreme Court in Aneeta Hada v. M/s. Godfather Travels & Tours Ltd1. and Manjula Kapoor v. State of Himachal Pradesh and another2, contended that the proceedings in C.C.No.135 of 2023 are liable to be quashed against the petitioner, who is a partner of the aforesaid firm. 3. Heard Sri Sardam Hussain, learned counsel representing Sri Ch.B.R.P. Sekhar, learned counsel for the petitioner, and Sri Chalasani Venkat, learned counsel for Respondent No.2. 4. Perused the petition, complaint and other material available on record, including the judgments relied upon by learned counsel for both sides. 5. Learned counsel for the petitioner initially contended that the petitioner is a partner of Sri Venkateswara Infra and that, in his capacity as a partner of the aforesaid firm, the cheque in question was issued to the complainant. It was contended that, in the absence of the firm being arrayed as a party to the 1 2012 (5) SCC 661 2 2026 INSC 769 4 SUN, J Crlp_9230_2022 complaint, the proceedings in C.C.No.135 of 2023 are not maintainable and as per Section 141 of the Act, the expression „company‟ includes a firm and, therefore, the proceedings are liable to be quashed. 6. Per contra, learned counsel for Respondent No.2, relying upon the judgment of the Hon‟ble Supreme Court in Dhanasingh Prabhu v. Chandrasekar and another 3, contended that a partnership firm is not a juristic person and, therefore, it need not necessarily be separately arrayed as an accused in a complaint under Section 138 of the Act and even the judgments relied upon by learned counsel for the petitioner refer to a company and its directors but not to a partnership firm and its partners. 7. As seen from the record, admittedly, respondent No.2 filed a complaint under Section 138 of the Act against the petitioner, who is one of the partners of Sri Venkateswara Infra, alleging that he had borrowed an amount of Rs.4,00,000/- from respondent No.2, agreeing to repay the same with interest at 24% per annum. Despite several demands, the petitioner failed to repay the amount and, ultimately, issued cheque bearing No.000498 dated 15.04.2020, drawn on Andhra Bank, Kukatpalli Branch, Hyderabad. The complainant presented the said cheque for collection through ICICI Bank Ltd., Srinivasa Nagar Bank Colony, Vijayawada, and the cheque was returned unpaid with the endorsement “FUNDS INSUFFICIENT”. Thereafter, upon complying with the statutory requirements, Respondent No.2 filed the present complaint, which was registered as C.C.No.135 of 2023. The said case is pending on the file of the V Additional Chief Metropolitan Magistrate, Vijayawada. Since the partnership firm was not arrayed as an accused, the petitioner has filed the present petition seeking to quash the proceedings against him. 8. It is needless to state that the liability of the partners of a partnership firm is joint and several in respect of the acts of the firm. Sections 25 and 26 of the Partnership Act recognise the liability of partners, which is distinct from the 3 (2025) 10 SCC 96 5 SUN, J Crlp_9230_2022 limited liability of shareholders in a company. In criminal law, the liability arising from an offence committed in the course of the business of a firm has to be determined with reference to the relevant statutory provision. A partnership firm carries on business through its partners, and the firm name is merely a convenient mode of describing the partners constituting the firm. The firm name is a collective name for the partners at a given point of time, and acts done in the firm name are, in substance, acts of the partners. 9. Section 138 of the Act deals with the offence relating to dishonour of a cheque. Section 141 deals with offences committed by companies, and, by virtue of Explanation (a), the expression „company‟ includes a firm. Section 141(1) fastens liability upon the person who, at the time the offence was committed, was in charge of and responsible for the conduct of the business of the company, as well as upon the company itself. The relevant provisions of Section 141 read as follows: “141. Offences by companies. — (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the 6 SUN, J Crlp_9230_2022 company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this section,— (a)“company” means any body corporate and includes a firm or other association of individuals; and (b)“director”, in relation to a firm, means a partner in the firm.” 10. In the judgment relied upon by learned counsel for the petitioner in Aneeta Hada (supra), the Hon‟ble Supreme Court held that the company must be arrayed as an accused in a prosecution under Section 141 of the Act, as the company is a separate juristic person. The Hon‟ble Supreme Court distinguished the case before it on the ground that the concerned entity was a company and not a partnership firm. Therefore, the said judgment is not applicable to the facts of the present case. 11. In the other case, namely, Manjula Kapoor (supra), there is also no reference to a partnership firm. Whereas, in the judgment relied upon by learned counsel for Respondent No.2, namely, Dhanasingh Prabhu (supra), the Hon‟ble Supreme Court has categorically held as follows: “64. This also demonstrates the fact that while a Director is a separate persona in relation to a company, in the case of a partnership firm, the partner is not really a distinct legal persona. This is because a partnership firm is not really a legal entity separate and distinct from its partners, as a company is from its Directors, but can have a legal persona only when the partnership firm is considered along with its partners. Thus, the partnership firm has no separate recognition, either jurisprudentially or in law, apart from its partners. Therefore, while a Director of a company can be vicariously liable for an offence committed by a company, insofar as a partnership firm is concerned, when the offence is committed by such a firm, in substance, the offence is committed by the partners of the firm and not just the firm per se. Therefore, the partners of the firm are liable for the dishonour of a cheque, even though the cheque may have been issued in the name of the firm and the offence is committed by the firm. Therefore, in law and in jurisprudence, when a partnership firm is proceeded against, in substance, the partners are liable and the said liability is joint and several and is not vicarious. This is unlike a company which is liable 7 SUN, J Crlp_9230_2022 by itself and, since it is an artificial juristic entity, the persons in charge of the affairs of the company or who conduct its business only become vicariously liable for the offence committed by the company. 65. However, jurisprudentially speaking, the partners of a partnership firm constitute the firm and a firm is a compendious term for the partners of a firm. This is opposed to the position of a Director in a company, which is a body corporate stricto sensu, and such a company is a separate juristic entity vis-à-vis the Directors. On the other hand, a partnership firm has no legal recognition in the absence of its partners. If a partnership firm is liable for the offence under Section 138 of the Act, it would imply that the liability would automatically extend to the partners of the partnership firm jointly and severally. This underlying distinction between a partnership firm and a company, which is a body corporate, has to be borne in mind while dealing with an offence committed by a company or a partnership firm, as the case may be, within the meaning of Section 138 read with Section 141 of the Act. To reiterate, in the case of a partnership firm, there is no concept of vicarious liability of the partners as such. The liability is joint and several because a partnership firm is the business of the partners, and one cannot proceed against only the firm without the partners being made liable.” 12. It is necessary to distinguish between a partnership firm and a company. A partnership is a relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. A firm is not a legal entity separate from its partners; it is a compendious name for the partners. On the other hand, a company is a separate legal entity, having a status distinct from its shareholders, as contemplated under Section 9 of the Companies Act, 2013. 13. Upon an overall scrutiny of the material available on record, coupled with the aforesaid authorities, it can be safely be held that a partnership firm is not a separate legal entity distinct from its partners and that the partners are jointly and severally liable for acts done in the name of the firm. Therefore, a complaint under Section 138 of the Act is maintainable against a partner even if the firm is not separately arrayed as an accused or served with notice, since notice to the partner is, in the circumstances of the present case, deemed notice to the firm. 8 SUN, J Crlp_9230_2022 14. For the foregoing reasons, this Court is of the considered view that there are no merits in the present petition. A complaint under Section 138 of the Act against a partner of a partnership firm is maintainable even when the firm is not separately arrayed as an accused. Accordingly, this Court declines to allow the petition. 15. In the result, this Criminal Petition is dismissed. As a sequel, all miscellaneous petitions, if any, pending in this Criminal Petition shall stand closed. ___________________ SUNITHA GANDHAM,J Date: 30.09.2026 SSA/GSN 9 SUN, J Crlp_9230_2022 148 THE HONOURABLE SMT JUSTICE SUNITHA GANDHAM CRIMINAL PETITION NO: 9230/2022 Date: 30.09.2026 SSA/GSN