Court upholds criminal proceedings under Section 138, emphasizing trial necessity for director's liability despite resignation.

The Court declined to quash the criminal proceedings under Section 138 of the Negotiable Instruments Act, emphasizing the need for trial to determine the petitioner's actual role and responsibility in the accused company despite her resignation as Director. The Court highlighted the necessity of factual adjudication based on the complaints alleging the petitioner's liability, referencing relevant precedents to support its decision. Consequently, the criminal original petitions and connected miscellaneous petitions were dismissed, mandating the petitioner to undergo trial to establish her resignation and lack of responsibility for the company's actions.

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Issues:
Quashment of criminal proceedings under Section 138 of the Negotiable Instruments Act based on the petitioner's resignation as Director of the accused company.

Analysis:
The petitioner sought quashment of criminal proceedings under Section 138 of the Act, arguing that she resigned as Director of the accused company before the issuance of the subject cheques. The complainant alleged the petitioner's liability as a partner of the company. The petitioner presented Form-32 to show her resignation, while the respondent disputed its veracity.

The respondent contended that the petitioner remained in charge of the company's affairs, opposing the petitioner's claim of resignation. The Court referred to precedents like S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, emphasizing the necessity to aver the accused's responsibility for the company's conduct. The complaints specifically stated the petitioner's role, leading to a trial for factual adjudication.

Precedents like Deepak Gupta v. Raghavendra Steels Ltd. highlighted the sufficiency of Form A to establish partnership. However, conflicting views in cases like I. Dharmapaul v. D. Chandrasekaran and M.S. Rama Mohan Rao v. Mrs. S. Nagu Bai emphasized the need for evidence on management roles. The Supreme Court's position in S.V. Mazumdar v. Gujarat State Fertilizers Co. Ltd. reiterated the need for evidence to determine responsibility for business conduct.

The Court noted the petitioner's initial directorship, resignation, and the subsequent cheque issuances. Disputes over the petitioner's status and responsibility necessitated trial for resolution. The Court declined to quash the proceedings, emphasizing the need for trial to ascertain the petitioner's actual role and responsibility in the company.

In conclusion, the Court dismissed the criminal original petitions and connected miscellaneous petitions, requiring the petitioner to face trial to prove her resignation and lack of responsibility for the company's conduct.

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