Former director liability ends when resignation is accepted and duly filed, barring prosecution for later company default.

Criminal proceedings for a company default could not be sustained against a former director who had ceased to hold office before the relevant default, where the resignation had been accepted by the board and duly intimated to the Registrar of Companies through Form 32. The record of resignation was undisputed, and similar proceedings arising from later meetings had already been quashed and attained finality. The governing principle is that liability for a corporate default does not continue against a person who was no longer a director at the material time.

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Issues: Whether the criminal proceedings against a former director were liable to be quashed on the ground that he had resigned long before the alleged default and the resignation had been accepted and intimated to the Registrar of Companies.

Analysis: The record showed that the appellant's resignation had been accepted by the board in 1997 and that intimation along with Form 32 had been filed with the Registrar of Companies. The record was not disputed by any counter affidavit. The Court also noted that similar proceedings against the appellant arising out of later meetings had already been quashed by the High Court and had attained finality. In these circumstances, the prosecution based on the alleged default in 2005 could not be sustained against a person who was no longer a director.

Conclusion: The criminal proceedings were liable to be quashed.

Ratio Decidendi: A prosecution for a company default cannot be sustained against a person who had ceased to be a director before the relevant event, where the resignation stands accepted and duly intimated to the Registrar of Companies.

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