Resigned director and cheque dishonour liability: prosecution cannot continue without material showing responsibility at the relevant time.

A resigned director whose cessation was recorded in the company's statutory records before the cheques were issued could not be fastened with vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, because such liability requires material showing that the accused was in charge of and responsible for the company's business at the relevant time. Where the complaint contained no supporting averments or material linking the former director to the issuance of the cheques or the underlying transaction, continuation of the prosecution was treated as an abuse of process. On those facts, the criminal proceedings were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973.

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Issues: (i) Whether a resigned director, whose resignation stood recorded in the company's statutory records before the cheques were issued, could be fastened with liability under the dishonour of cheque provisions; (ii) Whether the criminal proceedings against such director were liable to be quashed for want of material showing involvement in the transaction.

Issue (i): Whether a resigned director, whose resignation stood recorded in the company's statutory records before the cheques were issued, could be fastened with liability under the dishonour of cheque provisions.

Analysis: Liability under Section 141 of the Negotiable Instruments Act, 1881 attaches only to a person who was in charge of and responsible for the conduct of the business of the company at the time of the offence, subject to the statutory exceptions. Vicarious criminal liability cannot be presumed and must be founded on necessary averments and supporting material showing the accused's role. Where the resignation of the director stood accepted and reflected in the company records before the cheques were drawn, and the resignation was not disputed, the factual basis for fastening liability was absent.

Conclusion: The resigned directors could not be held liable for the cheque dishonour prosecution.

Issue (ii): Whether the criminal proceedings against such director were liable to be quashed for want of material showing involvement in the transaction.

Analysis: In proceedings under Section 482 of the Code of Criminal Procedure, 1973, interference is warranted where the complaint lacks material showing the accused's complicity and compelling the accused to stand trial would amount to abuse of process. The record showed that the appellants had ceased to be directors before the cheques were issued and there was no material connecting them with issuance of the instruments. In those circumstances, continuance of the prosecution was unjustified.

Conclusion: The criminal proceedings against the appellants were liable to be quashed.

Final Conclusion: The appellants, having resigned before the cheques were issued and having no shown role in the transaction, were entitled to relief from prosecution and the impugned proceedings could not be sustained.

Ratio Decidendi: A director who has validly resigned before the cheque is issued, and against whom the complaint contains no material showing responsibility for the company's affairs at the relevant time, cannot be subjected to vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, and the prosecution may be quashed under Section 482 of the Code of Criminal Procedure, 1973.

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