Director resignation before closure resolution bars penal prosecution for alleged Industrial Disputes Act non-compliance.

A person who had ceased to be a director before the special resolution for winding up or closure of the undertaking cannot be fastened with penal liability for alleged non-compliance with closure requirements under the Industrial Disputes Act merely because his name appeared in the closure proceedings. The Madras HC noted that the petitioner had resigned from the board before the resolution was passed, and no material showed responsibility for the closure decision at the relevant time. Personal prosecution was therefore not made out, and the impugned government order was quashed only as against the petitioner.

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Issues: Whether the petitioner, having resigned as director before the special resolution for winding up of the company, could be prosecuted for alleged violation of the closure provisions under the Industrial Disputes Act.

Analysis: The documents on record showed that the petitioner had resigned from the board before the resolution to wind up the company was passed and that the winding-up process had commenced with the resolution. The impugned prosecution was founded on closure of the industrial undertaking without prior permission under the statutory closure provision and the consequential penal provision. Since the petitioner was not shown to be a director or responsible for the closure decision when the resolution was passed, personal liability for the alleged offence was not made out.

Conclusion: The petitioner was not liable to be prosecuted for the alleged violation, and the impugned government order was quashed only insofar as it related to the petitioner.

Ratio Decidendi: A person who had ceased to be a director before the resolution for closure or winding up cannot be proceeded against for penal liability arising from that closure merely because his name appeared in the closure-related proceedings.

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