Resigned director liability under cheque dishonour law fails when forged loan documents undermine vicarious responsibility.

Vicarious liability under Sections 138 and 141 of the Negotiable Instruments Act requires material showing that the accused was in charge of and responsible for the company's business at the relevant time. Where the record showed that a director had resigned before the cheque date, and the loan documents allegedly bearing the director's signatures were found by FSL not to be genuine, the foundation for fastening liability was undermined. On those facts, continuation of the complaint and summoning process was treated as abuse of process, and the proceedings against the director were set aside.

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Issues: Whether the summoning order and complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed against a director who had resigned before the cheque date and whose signatures on the loan documents were found to be forged.

Analysis: Liability under Sections 138 and 141 of the Negotiable Instruments Act, 1881 depends on the accused being shown to have been in charge of and responsible for the conduct of the company's business at the relevant time. The record showed that the petitioner had resigned as director before the cheque was issued. The signature on the loan documents was disputed and the FSL opinion indicated that the signatures were not those of the petitioner. The forged nature of the documents weakened the foundation for attributing responsibility to the petitioner for issuance of the cheque and for fastening vicarious liability under the penal provision. Continuation of the criminal proceedings in such circumstances would amount to abuse of process.

Conclusion: The petition was allowed. The complaint, summoning order, and further proceedings against the petitioner were set aside.

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