Resigned directors cannot face cheque dishonour prosecution without specific averments of control at the relevant time.

A person who had resigned as a director before the agreement was executed and before the cheques were issued and dishonoured could not be subjected to prosecution under Sections 138 and 141 of the Negotiable Instruments Act on the basis of general averments alone. The complaint had to plead with specificity how and in what manner the accused was responsible for the company's business at the relevant time; a bare recital that the person was in charge of day-to-day affairs was insufficient. As the resignation was supported by undisputed Form 32 and the alleged transactions post-dated cessation of office, continuation of the complaints was treated as an abuse of process and the summons were quashed under Section 482 CrPC.

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Issues: Whether criminal complaints and summoning orders under Section 138 of the Negotiable Instruments Act, 1881 could be sustained against a person who had resigned as a director before the agreement was executed and before the cheques were issued and dishonoured.

Analysis: The resignation of the petitioner was supported by Form 32 and was not disputed. The cheques and the agreement on which the complaints were founded were subsequent to the petitioner's cessation as director. In prosecutions invoking vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, the complaint must contain specific averments showing how and in what manner the accused was responsible for the conduct of the company's business at the relevant time. Mere reproduction of the statutory phrase that a person was in charge of and responsible for day-to-day affairs is insufficient. Since the uncontroverted documents showed that the petitioner had ceased to be a director long before the alleged offence, the basis for fastening criminal liability was absent. In these circumstances, continuation of the prosecution would amount to abuse of process, and interference under Section 482 of the Code of Criminal Procedure, 1973 was justified.

Conclusion: The complaints and the summons issued against the petitioner were quashed.

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