Former director liability under cheque dishonour law fails when resignation is proved by public records and complaint lacks specific averments.

A former director who had resigned before the dishonoured cheques were issued could not be proceeded against under Section 138 of the Negotiable Instruments Act where Form 32 and the certified annual return filed with the Registrar of Companies showed cessation of directorship. The Court treated the annual return as a public document with evidentiary value under the Companies Act, 1956 and Section 74(2) of the Evidence Act. It also noted that the complaint contained only a bald assertion that the director was in charge of and responsible for the company's business, without specific averments of role. On those materials, continuation of the prosecution was an abuse of process and quashing was justified.

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Issues: Whether the criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed against a former director who had resigned before the cheques were issued, and whose cessation was supported by Form 32 and the annual return filed with the Registrar of Companies.

Analysis: The appellant had replied to the statutory notice asserting resignation from the directorship in 1998, and the complaint did not disclose that reply. The materials placed before the Court, including Form 32 and the certified annual return, showed cessation of directorship before the cheque transactions in 2004. A certified copy of the annual return filed with the Registrar of Companies is a public document, and the relevant provisions of the Companies Act, 1956, together with Section 74(2) of the Indian Evidence Act, 1872, support its evidentiary value. The complaint also contained only a bald assertion that the appellant was in charge of and responsible for the company's business, without specific averments as to her role. In such circumstances, continuation of the prosecution would amount to an abuse of process, and the High Court could exercise inherent jurisdiction to prevent injustice.

Conclusion: The complaint could not be sustained against the appellant, and quashing of the criminal proceedings was justified.

Final Conclusion: The prosecution was set aside insofar as the appellant was concerned because she had ceased to be a director before the relevant transactions and the complaint lacked the necessary specific averments to attract liability.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, a former director who had resigned before the dishonoured cheques were issued cannot be proceeded against when reliable public documents establish the resignation and the complaint contains only general averments of responsibility.

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