Retired Partner Shielded from Section 138 NI Act Prosecution Without Proper Averments: Calcutta High Court Rules in Shreya Banerjee Vs Ajesh Khem

Background and Context

The Calcutta High Court, in a significant ruling delivered on 11th September 2026, quashed criminal proceedings initiated against a retired partner of a partnership firm under Section 138 of the Negotiable Instruments Act, 1881. The case, bearing CRR 782 of 2026, arose from a complaint filed before the Judicial Magistrate, 2nd Court, Alipore, registered as C. Case No. 75 of 2025. The Court's decision underscores a well-established yet frequently overlooked principle — that vicarious criminal liability cannot be presumed or inferred; it must be explicitly and specifically pleaded in the complaint itself.

The matter revolved around three dishonoured cheques totalling Rs. 16,93,000/-, issued by the partnership firm M/s Steakalicous Restauranteur, allegedly towards outstanding occupational charges for the period May 2024 to August 2024, arising from lease and utility agreements executed on 9th March, 2018. The petitioner, Shreya Banerjee, had retired from the firm by virtue of a deed of retirement dated 27th March, 2023, with effect from 3rd April, 2023 — more than a year before the disputed dues arose and well before the cheques dated 1st September 2024, 9th September 2024, and 15th September 2024 were issued.

Facts of the Case

The Complaint's Foundation

The complainant, Ajesh Khem (opposite party), had entered into lease and utility agreements with the partnership firm M/s Steakalicous Restauranteur on 9th March, 2018, for occupation of approximately 2,200 square feet of built-up area and about 1,500 square feet of rooftop open space at 192A, Sarat Bose Road. Payments under these agreements were made on a periodic basis and were duly acknowledged up to April 2024.

However, from May 2024 to August 2024, an amount of Rs. 16,93,000/- (along with GST) remained unpaid towards occupational charges. To settle this outstanding amount, the firm issued three cheques. When these cheques were presented for encashment on 23rd October 2024, they were returned unpaid due to insufficient funds. Following the statutory notice period, the complainant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, impleading the firm and its partners — including the petitioner Shreya Banerjee.

The Petitioner's Position

The petitioner raised the following key contentions before the High Court:

  • She was not the signatory of any of the three dishonoured cheques. The complaint itself, in paragraph 9, acknowledged that accused no. 2, Mainak Chakraverti, had issued the impugned cheques.
  • She had functioned only as a sleeping partner and had no involvement in the day-to-day operations of the firm.
  • She had retired from the firm through a deed of retirement dated 27th March, 2023, effective 3rd April, 2023, which was never disputed or challenged by anyone.
  • The bank account from which the cheques were issued was different from the account used for ordinary business operations, demonstrating her lack of knowledge or involvement.
  • The outstanding dues of Rs. 16,93,000/- related to May 2024 to August 2024 — a period commencing over a year after her retirement.
  • No specific role was attributed to her in the complaint; she was merely named as an accused on the basis of her past status as a partner.

The Opposite Party's Arguments

The complainant's counsel argued as follows: