There are times in business when one of the partners cheats the other. In the case of the unregistered firm, it cannot sue its partners or other persons. If anyone of the partner breaches the agreement the other partners can take legal action against him. They can file a case under Criminal Breach of Trust and cheating. Even in the absence of a partnership deed, you have to demonstrate partnership by way of subsequent business conduct. You can contact me further if you wish to take this forward. A signed partnership deed is not mandatory to prove partnership. You must prepare for a legal defence specially if the consequences are of criminal nature like cheating, breach of trust etc.. If the other partner has been part of transactions and the amount is recieved in joint account then chances are that both can be made liable and action can be taken as per law against both. However, it depends on the facts and nature of transactions to give precise advice.
For filing a suit, it has to be proved that the particular business partner is untrustworthy and could harm the business with his fraudulent act. The evidence collected has to show that the accounting errors like missed entries in an accounting book, credit list mismatch etc along with the proof of withdrawal receipt he made through credit/ debit card, cash register entries. Apart from the fraud in money, if the partner reveals the details or secret of the firm to the other third party, he would have committed a breach of trust and the other person can sue for the breach of trust. Generally, a criminal suit will be filed under Sec 420 of IPC, if the partner commits cheating, or acted dishonestly and also under Sec 406 of IPC for criminal breach and also a civil suit for recovery of money and will be arrested and penalized under the respective section.
Reference: Indian Penal Code, 1860