Cheque signatory director liability under the Negotiable Instruments Act continues despite later resignation, absent unimpeachable exculpatory material.

A director who signed the dishonoured cheques and was specifically averred in the complaint as being responsible for their issuance falls within the liability framework of Section 141 of the Negotiable Instruments Act, 1881, even if he resigned later. The High Court noted that inherent jurisdiction under Section 482 CrPC should be exercised only where unimpeachable material shows the director had no concern with the cheques or where the prosecution is plainly abusive. In the absence of such material, the summoning and notice orders were not interfered with and the criminal proceedings were permitted to continue.

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Issues: Whether the petitioner, being a signatory to the cheques and a director at the time of issuance but having resigned later, could be proceeded against under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, and whether the High Court should exercise its inherent jurisdiction to interfere with the summoning and notice orders.

Analysis: The petitioner's resignation was subsequent to the issuance of the cheques, and the complaint contained specific averments that he was a director and one of the signatories. A cheque signatory is directly connected with the dishonoured instrument and falls within the scope of liability contemplated by Section 141 of the Negotiable Instruments Act, 1881. The Court also noted that interference under Section 482 of the Code of Criminal Procedure, 1973 is justified only where unimpeachable material shows that the director could not have been concerned with the issuance of the cheques or where continuation of the prosecution would amount to abuse of process. No such material was shown.

Conclusion: The petitioner could validly be proceeded against for the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, and no ground for interference with the impugned orders was made out.

Final Conclusion: The challenge to the criminal proceedings failed, and the prosecution against the petitioner was allowed to continue.

Ratio Decidendi: A director who is also a signatory to a dishonoured cheque can be proceeded against under Section 141 where the complaint contains basic averments of responsibility, and inherent jurisdiction should not be used to quash such proceedings absent unimpeachable evidence negating liability.

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