Director liability in cheque dishonour cases can survive resignation where complaint averments and sworn verification show prima facie involvement.

In a cheque dishonour prosecution under sections 138 and 141 of the Negotiable Instruments Act, a director's subsequent resignation does not by itself negate liability where the complaint links the cheque to an earlier transaction and the directors were part of the arrangement when it was made. Specific averments that the directors were in charge of the company's day-to-day affairs, supported by the complainant's sworn verification before the Magistrate, can constitute sufficient prima facie material for issuance of process. On the facts discussed, the absence of postal acknowledgment and reliance on cases involving only bald allegations did not undermine the complaint, and the process against the directors was sustained.

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Issues: (i) Whether resignation of directors before presentation and dishonour of post-dated cheques negated their liability or justified quashing of process under sections 138 and 141 of the Negotiable Instruments Act, 1881. (ii) Whether the complaint and the complainant's verification statement disclosed sufficient material to make out a prima facie case for issuance of process against the directors.

Issue (i): Whether resignation of directors before presentation and dishonour of post-dated cheques negated their liability or justified quashing of process under sections 138 and 141 of the Negotiable Instruments Act, 1881.

Analysis: The resignation of the petitioners was not accepted as a complete answer to the prosecution. The complaint referred to the lease agreement under which the liability arose, and the schedule to that agreement showed the post-dated cheques, including the cheque in question. Since the cheque was linked to the earlier agreement and the petitioners were directors when the arrangement was made, their subsequent resignation did not by itself wipe out the basis for proceeding under sections 138 and 141.

Conclusion: The resignation did not defeat the complaint or the process issued against the directors.

Issue (ii): Whether the complaint and the complainant's verification statement disclosed sufficient material to make out a prima facie case for issuance of process against the directors.

Analysis: The complaint contained specific averments that the petitioners were directors and were in charge of the day-to-day affairs of the company, and the complainant repeated those assertions on oath before the Magistrate. Applying the principles governing quashing of process, the material could not be said to disclose no case at all or to omit the essential ingredients of the offence. The challenge based on absence of postal acknowledgment and the reliance on authorities concerning bald allegations were rejected on the facts of this case.

Conclusion: The complaint disclosed a prima facie case and the issue of process was upheld.

Final Conclusion: The petitions failed because the allegations, complaint averments, and sworn verification were sufficient to sustain prosecution and process against the petitioners for the cheque dishonour complaint.

Ratio Decidendi: For issuance of process in a cheque dishonour prosecution, specific averments that directors were in charge of the company's affairs, supported by a sworn verification, can constitute sufficient prima facie material, and a subsequent resignation does not by itself preclude liability where the complaint links the cheque to an earlier transaction.

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