Court quashes summons under Section 138 NI Act as resigned directors found not liable.

The court quashed the order summoning the petitioners for the offense under Section 138 of the Negotiable Instruments Act. The petitioners, who had resigned from their director positions before the dishonour of the cheque in question, were found not liable for the specific cheque's dishonour. The court considered the evidence presented, including the resignation dates of the petitioners, and relieved them of vicarious liability in this case.

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Issues:
Complaint filed under Section 138 of the Negotiable Instruments Act, challenge to order summoning petitioners, petitioners' claim of non-involvement as directors, reliance on resignation dates, absence of liability at the time of dishonour.

Analysis:
The complaint was filed under Section 138 of the Negotiable Instruments Act by the respondent against the accused company and several individuals. The accused company had issued post-dated cheques as part of a settlement agreement, one of which was dishonored due to insufficient funds. Legal notice was issued, but no payment was made, leading to the complaint. The petitioners, who were non-executive independent directors of the accused company, challenged the order summoning them, claiming they were not directors at the time of the settlement, cheque issuance, or dishonour. They argued that they were not responsible for the company's day-to-day affairs and were not named as accused in other complaints.

The petitioners contended that they had resigned from their director positions before the events in question, supported by evidence of filing Form-32 with the Registrar of Companies. The court noted that the petitioners were only summoned for offenses under Section 138 of the NI Act, not for other charges or previous dishonored cheques. As the petitioners were no longer directors at the time of the dishonour and had provided evidence of resignation, vicarious liability could not be imposed on them for the dishonour of the specific cheque in question.

The respondent did not file a reply and relied on a previous submission. The court acknowledged the resignation dates of the petitioners and the lack of liability at the time of the dishonour. Considering the evidence presented and the specific charges the petitioners were summoned for, the court quashed the order summoning the petitioners for the offense under Section 138 of the Negotiable Instruments Act. The petitions and applications were disposed of accordingly, relieving the petitioners of vicarious liability in this case.

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