Where Allegations Are Against A Partnership Firm Then Its Partner Is Jointly & Severally Liable For The Same: Jharkhand High Court

The bench of Justice Subhash Chand observed thus as it denied anticipatory bail to a partner of a firm named M/S Bhanu Constructions on the ground that in his capacity as a partner of the firm, he was prima facie involved in committing an offence under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002.

"In view of Section 25 of the Indian Partnership Act, 1932 every partner of a firm is jointly along with other partners and also severally liable for all acts of the firm done, while he is a partner. Therefore, even if the charge sheet was not filed against the applicant in the scheduled offence in an individual capacity; and substantially and materially the allegations are against M/s. Bhanu Construction firm and the authorized signatory Sanjay Kumar Tiwary against whom the charge-sheet was filed in the scheduled offence being in individual capacity also. But for the act of the firm both partners are liable and it cannot be accepted that the applicant Suresh Kumar was not involved in the alleged offence," the Court remarked.

The case in brief

An SBI bank employee/public servant dishonestly authorised the transfer of an amount of over Rs.100.01 crores to the bank account of M/s. Bhanu Construction resulting in wrongful loss to the State Bank of India corresponding wrongful gain to M/s. Bhanu Construction.

It may be noted that M/s. Bhanu Construction has two partners, namely Sanjay Kumar Tiwary and Suresh Kumar (present applicant).

A charge sheet was filed by the CBI before the Spl. Judge, C.B.I., A.C.B., Ranchi against Sanjay Kumar Tiwary (first partner of the firm), M/s. Bhanu Construction, a partnership firm and others under sections Section 120-B read with 406, 409 and 420 of the Indian Penal Code and 13(2) read with 13(1)(d) of the Prevention of Corruption Act.

It was alleged that Sanjay Kumar Tiwary (the first partner of the firm) used the said amount for his own use and transferred the same to various accounts for different purposes. The second partner/present applicant was not named in CBI's charge sheet.

However, in 2021, the Enforcement Case registered Information Report No.03 of 2021 registered under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 against the applicant alleging that being a partner of the firm, he was getting the profit from the firm and the proceeds of the crime which had gained by the firm in unlawful manners were also gained by the applicant not in an individual capacity but as a partner of the said firm.

Now, seeking bail in this matter, the applicant filed the instant anticipatory bail plea claiming that he was not the signatory of the alleged account of M/s Bhanu Construction, rather it was Sanjay Kumar Tiwary, who was the sole signatory of the alleged account of the said firm and the applicant has no role in transferring the alleged amount from any account either of himself or any other person.

Court's observations

At the outset, the Court noted that though in the schedule offence, the charge sheet was not filed against the present applicant (Suresh Kumar); however, the allegations have been made against M/s. Bhanu Construction is a partnership firm, and since, the applicant was and is the partner of the Firm, therefore, he would incur the liability.

The Court further noted that the applicant was a partner of the Firm and he was also very much aware in regard to the transfer of the alleged amount in the account of M/s. Bhanu Construction and the alleged amount was also laundered by another partner Sanjay Tiwary, who was the authorized signatory of the firm on behalf of the applicant also.

"In the case in hand, though the charge sheet was not filed in individual capacity against the applicant but all the allegations are against the M/s. Bhanu Construction, a partnership firm and the applicant is the partner of the said firm and he is jointly and severally liable for the act of the said firm," the Court further remarked as it took into account Section 25 of the Indian Partnership Act, 1932 which states that every partner of a firm is jointly along with other partners and also severally liable for all acts of the firm done, while he is a partner.

Consequently, the Court rejected the argument made by the counsel of the applicant that he was not involved in the commission of the alleged offence, as it noted that in the capacity of a partner of M/s. Bhanu Construction his involvement is prima facie made out and there are reasonable grounds for believing that he has committed the aforesaid offence and is likely to commit offence, if enlarged on bail.

Thus, the Court denied him anticipatory bail.

Case title - Suresh Kumar v. The Union of India through Directorate of Enforcement [A.B.A. No.4575 of 2022]

Case Citation: 2022 LiveLaw (Jha) 89

Click Here To Read/Download Order