Negotiable act sec 138

Achhru Kumar Singla (Querist) 05 January 2013 This query is : Resolved
A partnership firm of 3 partners have taken a loan from ICICI Bank. Due to dispute among the partners business has been shut down and the another PNB bank (the bank of which security cheques were given to the the ICICI Bank) is freezed. ICICI have presented the security cheque and cheque returned by the PNB bank due to "account freezed" by the partners but balance was available in the bank. ICICI Bank filed the case against all the 3 partners u/s 138 in 2010.

One of the partner is expired and the partner is not receiving the warrants issued by the court. Now Bank is saying to court that drop the another 2 accused and registered the case against the 3rd partner who attending the court proceedings.

kindly advice

can bank drop the 2 accuses and registered the case on 1 accused
what remedies available in such position.

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Adv.R.P.Chugh (Expert) 05 January 2013
I am afraid the answer would be yes. The Partners are severally as well as jointly liable for the firm's debts. 'Severally' means the creditor can recover the debt even from a single partner.

Single partner after paying off the entire debt can can seek contribution from other partners.

Who executed the cheque would also be important in this case

Raj Kumar Makkad (Expert) 05 January 2013
There is no doubt that the action of the bank to the extent of dropping proceeding against two and continuation against the single partner is legal, however, the possibility of success of the complaint filed under section 138 NI Act is doubtful as the account was freezed and was neither was closed nor was lacking the amount of the cheque.