Director's prior resignation defeated NI Act proceedings where cheques were issued after he had ceased office.

A director's resignation before the cheques were issued was treated as decisive in assessing liability under the Negotiable Instruments Act. The record showed that the petitioner had ceased to be a director from 23.07.2011, while the complaint and summoning order proceeded on the basis of his alleged directorship. As he was not holding that office when the cheques were issued, continuation of the criminal proceedings against him was held to be unjustified, and the summoning order and complaint proceedings were quashed qua the petitioner.

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Issues: Whether the summoning order and the criminal proceedings under the Negotiable Instruments Act were liable to be quashed against the petitioner on the ground that he had resigned as director before the cheques were issued.

Analysis: The resignation record showed that the petitioner had ceased to be a director with effect from 23.07.2011. The complaint and the summoning order proceeded on the basis of his alleged role as a director, but the material placed before the Court indicated that he was not holding that office when the cheques in question were issued. In such circumstances, continuation of proceedings against him was not justified.

Conclusion: The issue was decided in favour of the petitioner. The summoning order and the proceedings arising from the complaint were quashed qua the petitioner.

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