Resigned directors and cheque dishonour liability: later filing of resignation does not revive criminal responsibility.

Vicarious liability under Section 141 of the Negotiable Instruments Act applies only where a director was in charge of and responsible for the company's business at the time of the offence. A complaint cannot be sustained on a bare assertion where the record shows the directors had resigned before the cheques were issued and dishonoured. Later delay in communicating the resignation to the Registrar of Companies does not, by itself, revive criminal liability for cheque dishonour. The operative effect is that a duly resigned director cannot be proceeded against merely because the filing of the resignation was belated.

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Issues: (i) Whether directors who had resigned before issuance and dishonour of the cheques could be prosecuted for offences under Sections 138 and 141 of the Negotiable Instruments Act, 1881. (ii) Whether delayed communication of resignation to the Registrar of Companies could fasten criminal liability on the resigned directors.

Issue (i): Whether directors who had resigned before issuance and dishonour of the cheques could be prosecuted for offences under Sections 138 and 141 of the Negotiable Instruments Act, 1881.

Analysis: Vicarious liability under Section 141 is attracted only to persons who were, at the time of commission of the offence, in charge of and responsible for the conduct of the company's business. A bald assertion in the complaint is insufficient unless it specifies the role played by the director. Where the material placed before the Court shows that the directors had resigned before the cheques were issued, and there is no basis to treat them as persons in control of the company's affairs at the relevant time, the complaint cannot be sustained against them.

Conclusion: The prosecution of the resigned directors was not maintainable, and the complaints and summoning order were liable to be quashed.

Issue (ii): Whether delayed communication of resignation to the Registrar of Companies could fasten criminal liability on the resigned directors.

Analysis: The Court treated the resignation itself, once accepted and acted upon, as severing the directors' connection with the company. Delay in filing the change with the Registrar of Companies did not by itself revive liability for dishonour of cheques issued after resignation. The statutory filing requirement under the Companies Act did not override the substantive fact that the petitioners had ceased to be directors before the relevant transaction.

Conclusion: The delayed intimation to the Registrar of Companies did not create liability under the cheque dishonour proceedings.

Final Conclusion: The petitions succeeded and the criminal complaints and summoning order were set aside on the ground that the petitioners had ceased to be directors before the relevant cheques were issued.

Ratio Decidendi: For liability under Section 141 of the Negotiable Instruments Act, 1881, a director must be in charge of and responsible for the company's business at the time of the offence, and a duly resigned director cannot be prosecuted merely because the resignation was reported to the Registrar of Companies at a later date.

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