Dismissal of Revisional Application Challenging Liability under Negotiable Instruments Act

The court dismissed the revisional application challenging liability under Sections 138/141 of the Negotiable Instruments Act. It allowed the proceedings to continue against the petitioner, emphasizing that he could present his defense during the trial to prove lack of involvement or due diligence. The court noted the petitioner's resignation but raised questions about his continued role post-resignation, indicating the need for further evaluation during trial. The court highlighted that each case must be assessed based on its unique facts, leading to the decision to dismiss the challenge and proceed with the case.

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Issues Involved:
1. Liability under Sections 138/141 of the Negotiable Instruments Act, 1881.
2. Validity of the petitioner's resignation and its effect on liability.
3. Application of legal precedents to the case facts.

Detailed Analysis:

1. Liability under Sections 138/141 of the Negotiable Instruments Act, 1881:
The petitioner challenged the proceedings under Sections 138/141 of the Negotiable Instruments Act, 1881, for dishonour of cheques issued to liquidate liabilities. The complainant alleged that the accused issued cheques totaling Rs. 11,48,500, which were dishonoured due to insufficient funds. Despite repeated attempts to encash the cheques and issuing a demand notice, the accused did not pay the amount, leading to the initiation of the complaint.

2. Validity of the Petitioner's Resignation and Its Effect on Liability:
The petitioner argued that he resigned as a director on 29th September 2015, and his resignation was accepted on 30th September 2016, which was reflected in the statutory forms filed with the Registrar of Companies. He contended that he could not be held liable for the dishonoured cheque dated 30th November 2016, as he was no longer a director at the relevant time. The petitioner cited several legal precedents to support his argument that a director who has resigned cannot be held liable under Section 141 of the Negotiable Instruments Act for offences committed after their resignation.

3. Application of Legal Precedents to the Case Facts:
The petitioner relied on multiple judgments, including Rajasekar v. U.M.S. Radio Factory Limited and Harshendra Kumar D. v. Rebatilata Koley, to emphasize that liability under Section 141 arises only if the person was in charge of and responsible for the conduct of the business at the time the offence was committed. The complainant, however, argued that the petitioner was involved in the settlement agreement and issued cheques as part of the settlement, which included the dishonoured cheque in question. The complainant also pointed out that the petitioner used the company seal in October 2016, indicating his continued involvement.

The court noted that while the petitioner had resigned, his involvement in the settlement agreement and use of the company seal raised questions about his role. The court acknowledged the legal precedents but emphasized that each case must be evaluated based on its unique facts. The court highlighted that the petitioner’s actions post-resignation, such as signing the settlement agreement, could imply his continued responsibility.

The court concluded that the petitioner’s challenge was premature, as the case was at an initial stage. The court dismissed the revisional application, allowing the proceedings to continue. It was noted that the petitioner could rebut the presumption of liability during the trial by proving that the offence was committed without his knowledge or that he had exercised due diligence to prevent it.

Conclusion:
The revisional application was dismissed, and the proceedings against the petitioner under Sections 138/141 of the Negotiable Instruments Act were allowed to continue. The court emphasized that the petitioner could present his defense during the trial to prove his lack of involvement or due diligence.

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