Director Cleared of Cheque Bounce Liability After Resignation Under Section 141 of Negotiable Instruments Act

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....HC held that the Petitioner, who resigned as Director on 14.05.2015, cannot be held vicariously liable under Section 141 of the Negotiable Instruments Act for cheques dated 04.10.2016 and 20.12.2016. The court found no specific evidence connecting the Petitioner to the dishonoured cheques or the underlying debt. Following the Supreme Court's precedent in a similar case, the court emphasized that a former director cannot be held responsible for company affairs after resignation. The Petitioner was neither a signatory to the cheques nor part of the promissory note, thus rendering the vicarious liability claim unsustainable. Petition allowed.....