Resignation before cheque issuance bars Section 138 prosecution when the director was no longer in charge of company affairs.

Criminal proceedings under Section 138 of the Negotiable Instruments Act could not be sustained against a person who had resigned as director and chairman before the cheques were issued and before liability arose. Form 32 and company records showing the resignation were treated as public documents and relied on at the quashing stage. Since the resignation took effect on 4.10.1999, the petitioner was no longer in charge of or responsible for the company's affairs when the cheques were issued or when the dishonour notices gave rise to the cause of action. The proceedings against him were therefore quashed.

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Issues: Whether criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 could be quashed against a person who had resigned as director and chairman of the company before the cheques were issued and before the cause of action arose.

Analysis: Form 32 filed with the Registrar of Companies and the company records showed that the petitioner had resigned on 4.10.1999. Those materials were treated as public documents and could be relied on at the quashing stage. Once the resignation took effect, the petitioner ceased to be a director or chairman and was not in charge of or responsible for the company's affairs when the cheques were issued between 3.2.2000 and 15.2.2000 or when liability under the dishonour notices arose.

Conclusion: The petitioner could not be proceeded against under Section 138 of the Negotiable Instruments Act, 1881, and the proceedings against him were quashed.

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