Resigned director liability under cheque dishonour law can be quashed where documentary proof shows prior resignation and no role in issuance.

Vicarious criminal liability of directors under Section 141 of the Negotiable Instruments Act depends on whether the accused was in charge of and responsible for the company's business when the offence occurred. A bare averment may be enough to initiate process, but quashing is available where unimpeachable documents show the person had resigned before the cheque was issued and dishonoured and had no role in its issuance. On the materials relied on, the proceedings were quashed against the resigned directors, while the prosecution against the remaining accused continued.

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Issues: Whether criminal proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 could be quashed under Section 482 of the Code of Criminal Procedure, 1973 against directors who had resigned before the cheque was issued and dishonoured.

Analysis: Liability of a director for an offence by a company depends on the requirements of Section 141 of the Negotiable Instruments Act, 1881, namely that at the time of commission of the offence the person was in charge of and responsible for the conduct of the business of the company. A complaint containing the basic averment may justify issuance of process, but quashing can still follow where the accused places unimpeachable and uncontroverted material showing that he or she had ceased to be a director before the relevant offence. The resignation documents, board resolutions and statutory filings showed that the petitioners had resigned much before the cheque dated 22.10.2018 was issued and dishonoured, and they were neither signatories to the cheque nor shown to have any role in its issuance.

Conclusion: The proceedings were liable to be quashed against the petitioners, as continuation of the prosecution against them would amount to abuse of process.

Final Conclusion: The complaint and the cognizance order were set aside only insofar as the two petitioners were concerned, while the prosecution against the remaining accused was left to continue.

Ratio Decidendi: A director who had resigned before the cheque-related offence under the Negotiable Instruments Act was committed cannot be fastened with vicarious criminal liability under Section 141 merely on a bald averment, where unimpeachable documentary material establishes the prior resignation.

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