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2022 (6) TMI 286 - HC - Companies LawVicarious liability of partner of the firm - separate identity of partnership firm - summons issued to the petitioner - reply to the notice not received - violation of Section 240 (3) of Companies Act - HELD THAT:- It is revealed that the respondent SFIO filed private complaint against the petitioner for the offence punishable under section 240 (3) of Companies Act alleging that the petitioner was appointed as an Auditor of the company and notice was issued by the respondent for furnishing some details of the Company and he has filed to furnish. Therefore the offence was committed by the petitioner, hence liable for punishment and penal action. A partnership firm is not a corporate entity, it does not have a separate legal persona and this has several important legal consequences in the relationship between the parties all rights and duties only exist between the parties, inter se the right and duties of the partnership are the rights and duties of the partners for as per the partnership deed. Therefore, a partner cannot be bifurcated from a firm, for example for a firm minimum two partners are required, if one partner is retired either by resignation or by death, the firm becomes a proprietorship. Therefore, merely the petitioner running a firm in the name of N.D.S. & CO., but it is not a legal entity and it cannot be placed on par with the companies which is registered under the Companies Act - A partnership firm is not a separate legal entity distinct from its partner it is merely a collective name given to the individuals composing it and even as per the definition of the Indian Partnership Act, as person who have entered into partnership with one another called individually "partners" and collectively "a firm" and the name under which their business is. If an offence committed by the firm, is also an offence committed by the partners, it cannot be bifurcated as partners and the firm - the Trial Court, rightly took the cognizance against the petitioner for the offence punishable under section 240(3) of Companies Act. Criminal petition dismissed.
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