Director liability under the Negotiable Instruments Act requires specific averments and may be negated by undisputed resignation records.

Vicarious liability of a company director under Section 141(1) of the Negotiable Instruments Act arises only where the complaint contains specific averments that the director was in charge of and responsible for the company's business when the offence occurred; bare references to directorship or general assertions are insufficient. Undisputed public documents, including a resignation record filed with the Registrar of Companies, may be considered at the threshold in discharge or quashing proceedings. Where such documents show that the director had resigned before the cheque issuance, liability under Section 138 cannot be prima facie fastened, and the proceedings are not maintainable against that person.

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Issues: (i) Whether a director can be proceeded against under Section 141(1) of the Negotiable Instruments Act, 1881 in the absence of specific averments showing that he was in charge of and responsible for the conduct of the company's business at the time of the offence; (ii) Whether documentary material showing resignation of the director from the company, being a public document and undisputed on record, can be considered at the stage of discharge/quashing to determine liability under Section 138 of the Negotiable Instruments Act, 1881.

Issue (i): Whether a director can be proceeded against under Section 141(1) of the Negotiable Instruments Act, 1881 in the absence of specific averments showing that he was in charge of and responsible for the conduct of the company's business at the time of the offence.

Analysis: Vicarious criminal liability under Section 141(1) is exceptional and can arise only if the complaint contains clear allegations that, at the time the offence was committed, the director was in charge of and responsible for the conduct of the company's business. Mere reference to the accused as a director or a general assertion that the company acted through its directors is insufficient. The complaint and legal notice contained only omnibus allegations and did not attribute any specific role to the petitioner. The cheques were also signed by another director, not by the petitioner.

Conclusion: The complaint did not disclose the necessary foundational averments to fasten vicarious liability on the petitioner, and the issue is decided in favour of the petitioner.

Issue (ii): Whether documentary material showing resignation of the director from the company, being a public document and undisputed on record, can be considered at the stage of discharge/quashing to determine liability under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Although defence material is ordinarily not appreciated at the threshold, an exception exists for public documents or documents whose authenticity is not in dispute. A resignation record duly notified to the Registrar of Companies is of such character and can be looked into at the prima facie stage. On the facts, the petitioner's resignation had been accepted before the cheques were issued, so he had ceased to be in control of the company when the alleged offence occurred.

Conclusion: The resignation documents were rightly considered, and they negatived the petitioner's liability. This issue is decided in favour of the petitioner.

Final Conclusion: The criminal proceedings could not be maintained against the petitioner, as no prima facie basis existed to invoke vicarious liability after his resignation from the company.

Ratio Decidendi: For prosecution of a director under Section 141(1) of the Negotiable Instruments Act, 1881, the complaint must contain specific averments showing that the director was in charge of and responsible for the company's business at the relevant time, and undisputed public documents demonstrating prior resignation may be considered at the threshold to prevent abuse of process.

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