New Delhi, July 29 -- A recent Supreme Court ruling has plugged a longstanding loophole that often allowed defaulting partners of a firm to escape liability and evade prosecution on procedural grounds.

In a judgment delivered on a cheque-bounce case, the Supreme Court on 14 July ruled that such partners can be prosecuted directly even if the partnership firm itself is not formally named as an accused.

Setting aside a previous Madras High Court order, the apex court emphasised the fundamental legal distinction between a partnership firm and a company, reinforcing that partners bear direct, joint, and several liability for a partnership firm's actions-unlike directors of a company.

A partnership firm and its partners are the same in the ...