Former directors cannot face cheque dishonour prosecution when resignation preceded cheque issuance and no charge of company control was shown.

An erstwhile director who resigned before the cheques were issued and was not shown to be a signatory or in charge of the company's affairs could not be prosecuted under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The Court relied on undisputed, unimpeachable documents showing that the petitioners had ceased to be directors before the alleged offence arose, and held that continuation of the criminal proceedings would be unjust and an abuse of process. The revisions were allowed and the prosecution against the petitioners was quashed.

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Issues: Whether criminal proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 could be quashed against persons who had resigned as directors before the cheques were issued and were not shown to be signatories to the cheques.

Analysis: The petitions were founded on undisputed documents showing that the petitioners had retired from the directorship of the company before the date of issuance of the cheques. In such circumstances, they had no role in the affairs of the company when the alleged offence arose. The controlling principle applied was that while quashing proceedings, the Court may look at unimpeachable documents demonstrating that continuation of the prosecution would be unjust and an abuse of process. The Court accepted that the factual situation fell within that principle and noted that the petitioners were not the cheque signatories.

Conclusion: The criminal proceedings against the petitioners were liable to be quashed, as they could not be prosecuted for the cheque dishonour after having ceased to be directors before issuance of the cheques.

Final Conclusion: The revisions succeeded and the prosecution against the petitioners was terminated.

Ratio Decidendi: An erstwhile director who had resigned before issuance of the cheque and was not otherwise shown to be in charge of the company's affairs at the relevant time cannot be subjected to prosecution under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.

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