Cheating Charges Against Regiatered Firm But Not Updated

818 votes

As an advocate, Under the Indian Partnership Act, 1932, a partner, even while facing internal disputes such as forgery and cheating allegations from another registered partner, generally retains the authority to act as an agent of the firm for the purposes of its business. Therefore, such a partner can unilaterally sue a third party on behalf of the firm, provided the suit relates to an act of the firm done in the ordinary course of business and falls within the scope of the partner's implied or express authority. The internal dispute, while a serious matter between the partners, does not automatically strip a registered partner of their capacity to represent the firm externally, especially if the firm's registration is valid and the suing partner is shown as such in the Register of Firms. However, the maintainability of such a suit could be challenged by the third party if it can be demonstrated that the partner was acting outside their authority or against the interests of the firm, particularly if the internal dispute has fundamentally impaired the firm's ability to operate cohesively.

Advocate Mahrukh Khan LawRato

981 votes

If the firm is registered and there’s an internal dispute involving allegations like forgery and cheating between partners, the authority of any one partner to act unilaterally — especially to sue a third party — can become questionable. It largely depends on the nature of the dispute, terms of the partnership deed, and how representation of the firm is defined.

Advocate Nidhi Preetam Banvali LawRato