Valid resignation bars prosecution for later company default where the director had ceased to manage affairs before the alleged lapse.

A former director who had validly resigned, with the resignation accepted and communicated, could not be subjected to criminal prosecution for a company default arising after he had ceased to be in charge of or responsible for the company's affairs. The Court treated the resignation evidence as decisive on the petitioner's lack of connection with the company during the relevant period, so the alleged non-filing of the annual return could not fasten criminal liability on him. The contention that the offence was continuing did not change the position where the petitioner had already severed ties with the company.

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Issues: Whether the criminal proceedings could be quashed against the petitioner on the ground that he had resigned from the company long before the alleged default and had no connection with the company's affairs during the relevant period.

Analysis: The petitioner produced the resignation letter and acceptance thereof, showing that he had ceased to be associated with the company years before the financial year in question. The resignation was also communicated to the complainant. In these circumstances, the Court found that the petitioner had no role in the company's affairs during the period relating to the alleged non-filing of the annual return and could not be fastened with criminal liability for the default alleged against the company and its officers. The plea that the offence was continuing did not alter this position as against a person who had already severed his connection with the company.

Conclusion: The petitioner was not liable to face the criminal proceedings and the quash petition was allowed in his favour.

Ratio Decidendi: A former director who had validly resigned and whose resignation had been accepted and communicated cannot be subjected to prosecution for a company default occurring after he had ceased to be in charge of or responsible for the company's affairs.

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