Continued managerial liability persists until a company accepts resignation and formally relieves duties, so criminal responsibility may remain.

The court addressed whether a director/officer's statutory liability and obligation to file accounts cease upon mere dispatch of a resignation letter. Applying statutory definitions of director, managing director and officer, and examining documentary evidence that the petitioner retained managerial control and had not been formally relieved, the court held that resignation alone does not terminate managerial or officer capacity. Acceptance of resignation and formal relief from duties by the company are required for liability under the cited provisions to cease. Outcome: the petitioner's plea based on mere submission of resignation was rejected and the conviction and sentence were affirmed.

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Issues: Whether a director's liability under sections 159, 161 and 162 and the obligation to file balance-sheet under section 220(3) of the Indian Companies Act ceases by the mere sending of a resignation letter, without acceptance or relief from duties.

Analysis: The Court examined the statutory definitions of "manager", "managing director" and "officer" in sections 2(24), 2(26) and 2(30) of the Indian Companies Act and the offence provision in section 162. The petitioner held combined capacities: that of a director and of a governing/managerial officer exercising substantial management and control. The Court considered documentary evidence (returns showing the petitioner as governing director and a letter in which the petitioner acknowledged not being relieved) and contrasted resignation of an ordinary director with cessation of managerial duties. The Court concluded that managerial or officer capacity, entailing responsibility under the cited provisions, cannot be terminated merely by sending a resignation letter; acceptance by the company and formal relief from duties are necessary for liability to cease.

Conclusion: The petitioner's contention that mere submission of a resignation letter terminated his liability is rejected; the conviction and sentence are proper and the revision petitions are dismissed (decision in favour of the respondent).

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