Director liability in cheque dishonour cases fails without specific averments showing control of company affairs at the time of offence.

Vicarious liability under section 141 of the Negotiable Instruments Act requires specific averments that a director was in charge of and responsible for the company's business at the time of the offence. A bare recital that directors managed the business is insufficient. Here, the resignation letter and DIR-12 showed that the director had resigned before the cheque was issued, and the complaint contained no material showing his role after resignation or any consent, connivance, or negligence. The proviso requiring forwarding of resignation to the Registrar did not negate the resignation's effectiveness between the director and the company. The prosecution against him was therefore unsustainable and the complaint was quashed insofar as it related to him.

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Issues: Whether criminal proceedings under sections 138 and 141 of the Negotiable Instruments Act, 1881 could continue against a director who had tendered resignation before issuance of the cheque and whose complaint lacked specific averments showing his role in the company's affairs after resignation.

Analysis: The resignation letter and DIR-12 showed that the petitioner had resigned with effect from 13 March 2020, while the cheque was issued on 1 January 2021. The complaint did not contain material particulars showing that the petitioner was in charge of or responsible for the company's business at the relevant time, nor any statement suggesting consent, connivance, or negligence on his part. The requirement of fastening vicarious liability on a director under section 141 is not satisfied by a bare or mechanical recital that directors were responsible for the business of the company. The Court also noted that the proviso relating to forwarding a copy of resignation to the Registrar does not negate the effectiveness of resignation as between the director and the company.

Conclusion: The proceedings could not be sustained against the petitioner and were liable to be quashed.

Final Conclusion: Continuation of the prosecution against the petitioner amounted to an abuse of the process of law, and the complaint was set aside insofar as it concerned him.

Ratio Decidendi: To prosecute a director under section 141 of the Negotiable Instruments Act, 1881, the complaint must contain specific averments showing that the director was in charge of and responsible for the conduct of the company's business at the time of the offence; a person who had already resigned before issuance of the cheque cannot be fastened with vicarious liability in the absence of such material.

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