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CHEQUE BOUNS

WHEN A DIRECTOR IS NOT IN SERVICE WHILE THE CHEQUE WAS ISSUED, HE IS NOT LIABLE TO BE PROSECUTED – “…….The scope of Section 141 has been authoritatively discussed in the decision in S.M.S. 3 2007 (5) SCC 108 10

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 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CRIMINAL APPELLATE JURISDICTION

 CRIMINAL APPEAL NOS.360-377 OF 2011

 (Arising out of SLP (Criminal) Nos. 3008-3025 of 2008)

Harshendra Kumar D. .... Appellant

 Versus 

Rebatilata Koley Etc. ....Respondents

 JUDGMENT

R.M. Lodha, J. 

 Leave granted.

2. These 18 appeals, by special leave, are directed against 

the common judgment and order dated September 6, 2007 passed by 

Calcutta High Court whereby 18 criminal revision applications filed by 

the appellant for quashing the proceedings initiated by the 

 1

complainants in 18 complaint cases under Section 138 read with 

Section 141 of Negotiable Instruments Act, 1881 ( for short, `NI Act') 

against him have been dismissed.

3. The brief facts are these. The complainants were 

interested in business relationship with Rifa Healthcare (India) Pvt. 

Ltd. (for short, `the Company') for the sale of bio-ceramic products. 

The complainants, for the orders they had placed, issued demand 

drafts in favour of the Company. It appears that the Company had not 

delivered the products ordered by the complainants and accordingly 

they asked the Company for return of their money. On April 30, 2004, 

the Company issued 18 cheques bearing Nos. (i) 000843 for Rs. 

30,000/-; (ii) 00870 for Rs. 40,000/-; (iii) 000845 for Rs. 30,000/-; (iv) 

000852 for Rs. 3,00,000/-; (v) 00842 for Rs. 60,000/-; (vi) 000862 for 

Rs. 40,000/-; (vii) 000834 for Rs. 60,000/-; (viii) 000572 for Rs. 

40,000/-; (ix) 000827 for Rs. 30,350/-; (x) 000854 for Rs. 3,00,000/-; 

(xi) 000826 for Rs. 60,000/-; (xii) 000855 for Rs. 3,00,000/-; (xiii) 

000857 for Rs. 3,00,000/-; (xiv) 000858 for Rs. 3,00,000/-; (xv) 

000841 for Rs. 60,000/-; (xvi) 000871 for Rs. 40,000/-; (xvii) 000568 

for Rs. 40,000/- and (xviii) for Rs. 60,130/- drawn on UTI Bank Ltd., 

 2

Jayanagar, Bangalore in favour of the complainants. These 18 

cheques were dishonoured by the Bank/s on presentation.

4. In the month of December, 2004, the complainants filed 

18 complaints under Section 138 read with Section 141 of the NI Act. 

For the sake of brevity and convenience, we shall refer to the 

complaint no. 14512 of 2004. In the complaint, besides the Company, 

the appellant was arraigned as accused No. 3. It was alleged in the 

complaint that the Managing Director and the two Directors (including 

the appellant) were responsible for day-to-day affairs of the Company 

and that it was on their assurance that the complainant issued 

demand draft in favour of the Company and when the products of the 

Company were not received by the complainant, she contacted the 

accused persons and told them that she could not continue business 

with them and asked for return of her money. Accordingly, for and on 

behalf of the Company, in discharge of the existing liability, an 

account payee cheque was issued but the cheque was returned by 

the complainant's banker on presentation with the endorsement 

`insufficient fund'. The complainant then sent legal notice asking the 

accused persons to pay the amount of cheque within 15 days from 

 3

the date of the receipt of the notice but despite service of notice, no 

payment has been made. 

5. The concerned Metropolitan Magistrate issued summons 

to all the accused persons including the appellant.

6. The appellant challenged the proceedings initiated by the 

complainants against him by filing 18 revision applications under 

Section 397 read with Section 401 of the Criminal Procedure Code, 

1973 (for short, `Code') before the Calcutta High Court. In these 

revision applications, notices were issued to the complainants. On 

behalf of the appellant, the principal contention canvassed was that 

the appellant was appointed as Director of the Company on August 

27, 2003. He resigned from the directorship on March 2, 2004 which 

was accepted by the Board of Directors on that day itself with 

immediate effect. The factum of his resignation is also recorded in 

Form No. 32 filed by the Company with the Registrar of Companies 

on March 4, 2004. The 18 cheques which were issued on behalf of 

the Company to the complainants were issued after his resignation. 

The dishonour of these cheques through the complainants' bankers' 

was also subsequent to his resignation. In other words, it was 

submitted by the counsel for the appellant before High Court that at 

 4

the time when the cheques were issued or when the cheques were 

dishonoured, the appellant had no concern or connection with the 

Company. 

7. The High Court, however, relying upon a decision of 

Single Judge of that Court in Fateh Chand Bhansali v. M/s. 

Hindustan Development Corporation Ltd.1, held that resignation by 

the petitioner as Director of the Company is a defence of the 

accused and the defence is a matter for consideration at the trial on 

the basis of evidence which cannot be decided by the Court in 

revisional jurisdiction. The High Court considered the matter thus:

 "The question of the learned Advocate for the petitioner 

 is that the petitioner was not director of a company at 

 the material point of time because there is form 32 

 which shows the date when the petitioner was 

 appointed a director and when there came to be a 

 change of directorship of the company. According to Mr. 

 Trivedi learned Advocate for the petitioner, a Hon'ble 

 Judge of this Court in Saroj Kumar Jhunjhunwala Vs. 

 State of West Bengal and Anr. (2007) 1 C Cr.LR (Cal) 

 793 was pleased to hold that if before the issuance of 

 cheques, the accused-petitioner had resigned from the 

 directorship, then he cannot be held liable for the 

 offence. This decision which favours the petitioner has 

 been pitted against the decision in Fateh Chand 

 Bhansali Vs. M/s. Hindustan Development Corporation 

 Ltd., (2005) 1 C Cr. LR (Cal) 581 wherein another 

 Hon'ble Single Judge of this court with reference to a 

 good number of decisions including the decision in 

 State of M.P. Vs. Awadh Kishore Gupta & Ors., 2004 

1 (2005) 1 C Cr.LR (Cal) 581

 5

 SCC (Cr.) 352 held that the High Court while 

 considering the revisional application cannot look into 

 the papers and documents annexed to such application 

 as those were neither verified nor tested. In that 

 decision also the point was raised with reference to form 

 32 and His Lordship held that the decision of State of 

 M.P. Vs. Awadh Kishore Gupta and Ors. (Supra) is an 

 authority regarding permissibility of the High Court to 

 look into the papers and documents annexed to the 

 revisional application and the story of the petitioner that 

 they resigned from the company by submitting Form 32 

 and are, in no way, responsible for the alleged offence 

 is a defence of the accused person and the defence is a 

 matter for consideration at the trial on the basis of 

 evidence which cannot be decided by the court. It is 

 worth mentioning that this decision in Fateh Chand 

 Bhansali was rendered on 23.3.2005 while the decision 

 in Saroj Kumar Jhunjhunwala was rendered on 

 05.04.2007 and in this decision Fateh Chand Bhansali 

 was not placed before his Lordship for consideration 

 and judicial discipline demands that I should go by the 

 earlier decision, namely, Fateh Chand Bhansali 

 (Supra)." 

8. Section 138 and Section 141 were brought in the NI Act 

by the Banking, Public Financial Institutions and Negotiable 

Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988) with effect 

from April 1, 1989. These provisions as amended from time to time 

read as under :

 "S.138. Dishonour of cheque for insufficiency, etc., of 

 funds in the accounts.--Where any cheque drawn by a 

 person on an account maintained by him with a banker 

 for payment of any amount of money to another person 

 6

from out of that account for the discharge, in whole or in 

part, of any debt or other liability, is returned by the 

bank unpaid, either because of the amount of money 

standing to the credit of that account is insufficient to 

honour the cheque or that it exceeds the amount 

arranged to be paid from that account by an agreement 

made with that bank, such person shall be deemed to 

have committed an offence and shall without prejudice 

to any other provisions of this Act, be punished with 

imprisonment for a term which may extend to two years, 

or with fine which may extend to twice the amount of the 

cheque, or with both:

 Provided that nothing contained in this section 

shall apply unless--

(a) The cheque has been presented to the bank within a 

period of six months from the date on which it is drawn 

or within the period of its validity, whichever is earlier;

(b) The payee or the holder in due course of the 

cheque, as the case may be, makes a demand for the 

payment of the said amount of money by giving a notice 

in writing, to the drawer of the cheque, within thirty days 

of the receipt of information by him from the bank 

regarding the return of the cheque as unpaid; and

(c) The drawer of such cheque fails to make the 

payment of the said amount of money to the payee or, 

as the case may be, to the holder in due course of the 

cheque, within fifteen days of the receipt of the said 

notice. 

Explanation.--For the purposes of this section, "debt or 

other liability" means a legally enforceable debt or other 

liability.

S. 141. Offences by companies.--(1) If the person 

committing an offence under section 138 is a company, 

every person who, at the time the offence was 

committed, was in charge of, and was responsible to the 

company for the conduct of the business of the 

company, as well as the company, shall be deemed to 

 7

 be guilty of the offence and shall be liable to be 

 proceeded against and punished accordingly: 

 Provided that nothing contained in this sub-section shall 

 render any person liable to punishment if he proves that 

 the offence was committed without his knowledge, or 

 that he had exercised all due diligence to prevent the 

 commission of such offence:

 Provided further that where a person is nominated as a 

 Director of a company by virtue of his holding any office 

 or employment in the Central Government or State 

 Government or a financial corporation owned or 

 controlled by the Central Government or the State 

 Government, as the case may be, he shall not be liable 

 for prosecution under this Chapter.

 (2) Notwithstanding anything contained in sub-section 

 (1), where any offence under this Act has been 

 committed by a company and it is proved that the 

 offence has been committed with the consent or 

 connivance of, or is attributable to, any neglect on the 

 part of, any director, manager, secretary or other officer 

 of the company, such director, manager, secretary or 

 other officer shall also be deemed to be guilty of that 

 offence and shall be liable to be proceeded against and 

 punished accordingly.

 Explanation.--For the purposes of this section,--

 (a) "company" means any body corporate and includes 

 a firm or other association of individuals; and 

 (b) "director", in relation to a firm, means a partner in the 

 firm.]

9. The legal position concerning the vicarious liability of a 

director in a company which is being prosecuted for the offence under 

Section 138, NI Act has come up for consideration before this Court 

 8

on more than one occasion. In the case of S.M.S. Pharmaceuticals 

Ltd. v. Neeta Bhalla and Another2, the following questions were 

referred to a 3-Judge Bench for determination :

 "(a) Whether for purposes of Section 141 of the 

 Negotiable Instruments Act, 1881, it is sufficient if the 

 substance of the allegation read as a whole fulfil the 

 requirements of the said section and it is not necessary 

 to specifically state in the complaint that the person 

 accused was in charge of, or responsible for, the 

 conduct of the business of the company.

 b) Whether a director of a company would be deemed 

 to be in charge of, and responsible to, the company for 

 conduct of the business of the company and, therefore, 

 deemed to be guilty of the offence unless he proves to 

 the contrary.

 (c) Even if it is held that specific averments are 

 necessary, whether in the absence of such averments 

 the signatory of the cheque and or the managing 

 directors or joint managing director who admittedly 

 would be in charge of the company and responsible to 

 the company for conduct of its business could be 

 proceeded against."

10. The 3-Judge Bench of this Court answered the aforesaid 

questions thus:

 "(a) It is necessary to specifically aver in a complaint 

 under Section 141 that at the time the offence was 

 committed, the person accused was in charge of, and 

 responsible for the conduct of business of the company. 

 This averment is an essential requirement of Section 

 141 and has to be made in a complaint. Without this 

2 2005 (8) SCC 89

 9

 averment being made in a complaint, the requirements 

 of Section 141 cannot be said to be satisfied.

 (b) The answer to the question posed in sub-para (b) 

 has to be in the negative. Merely being a director of a 

 company is not sufficient to make the person liable 

 under Section 141 of the Act. A director in a company 

 cannot be deemed to be in charge of and responsible to 

 the company for the conduct of its business. The 

 requirement of Section 141 is that the person sought to 

 be made liable should be in charge of and responsible 

 for the conduct of the business of the company at the 

 relevant time. This has to be averred as a fact as there 

 is no deemed liability of a director in such cases.

 (c) The answer to Question (c) has to be in the 

 affirmative. The question notes that the managing 

 director or joint managing director would be admittedly 

 in charge of the company and responsible to the 

 company for the conduct of its business. When that is 

 so, holders of such positions in a company become 

 liable under Section 141 of the Act. By virtue of the 

 office they hold as managing director or joint managing 

 director, these persons are in charge of and responsible 

 for the conduct of business of the company. Therefore, 

 they get covered under Section 141. So far as the 

 signatory of a cheque which is dishonoured is 

 concerned, he is clearly responsible for the incriminating 

 act and will be covered under sub-section (2) of Section 

 141."

11. In N. Rangachari v. Bharat Sanchar Nigam Ltd.3, a 2-

Judge Bench of this Court discussed and considered S.M.S. 

Pharmaceuticals Ltd.2 and observed as follows :

 ".......The scope of Section 141 has been 

 authoritatively discussed in the decision in S.M.S. 

3 2007 (5) SCC 108

 10

 Pharmaceuticals Ltd. [2005 (8) SCC 89] binding on us 

 and there is no scope for redefining it in this case. 

 Suffice it to say, that a prosecution could be launched 

 not only against the company on behalf of which the 

 cheque issued has been dishonoured, but it could also 

 be initiated against every person who at the time the 

 offence was committed, was in charge of and was 

 responsible for the conduct of the business of the 

 company. In fact, Section 141 deems such persons to 

 be guilty of such offence, liable to be proceeded against 

 and punished for the offence, leaving it to the person 

 concerned, to prove that the offence was committed by 

 the company without his knowledge or that he has 

 exercised due diligence to prevent the commission of 

 the offence. Sub-section (2) of Section 141 also roped 

 in Directors, Managers, Secretaries or other officers of 

 the company, if it was proved that the offence was 

 committed with their consent or connivance.

 .................................................................................

 But as has already been noticed, the decision in S.M.S. 

 Pharmaceuticals Ltd. [2005 (8) SCC 89] binding on us, 

 has postulated that a Director in a company cannot be 

 deemed to be in charge of and responsible to the 

 company for the conduct of his business in the context 

 of Section 141 of the Act. Bound as we are by that 

 decision no further discussion on this aspect appears to 

 be warranted."

12. In the case of K.K. Ahuja v. V.K. Vora & Another.4, a 2-

Judge Bench of this Court had an occasion to consider the earlier 

decisions of this Court including the decision in the case of S.M.S. 

Pharmaceuticals Ltd.2 It was held that mere fact that at some point of 

time an officer of a company had played some role in the financial 

4 (2009) 10 SCC 48

 11

affairs of the company, that will not be sufficient to attract the 

constructive liability under Section 141 of the NI Act. The Court 

summarized the legal position as follows: 

 "(i) If the accused is the Managing Director or a Joint 

 Managing Director, it is not necessary to make an 

 averment in the complaint that he is in charge of, and is 

 responsible to the company, for the conduct of the 

 business of the company. It is sufficient if an averment 

 is made that the accused was the Managing Director or 

 Joint Managing Director at the relevant time. This is 

 because the prefix "Managing" to the word "Director" 

 makes it clear that they were in charge of and are 

 responsible to the company, for the conduct of the 

 business of the company.

 (ii) In the case of a Director or an officer of the company 

 who signed the cheque on behalf of the company, there 

 is no need to make a specific averment that he was in 

 charge of and was responsible to the company, for the 

 conduct of the business of the company or make any 

 specific allegation about consent, connivance or 

 negligence. The very fact that the dishonoured cheque 

 was signed by him on behalf of the company, would 

 give rise to responsibility under sub-section (2) of 

 Section 141.

 (iii) In the case of a Director, secretary or manager as 

 defined in Section 2(24) of the Companies Act or a 

 person referred to in clauses (e) and (f) of Section 5 of 

 the Companies Act, an averment in the complaint that 

 he was in charge of, and was responsible to the 

 company, for the conduct of the business of the 

 company is necessary to bring the case under Section 

 141(1) of the Act. No further averment would be 

 necessary in the complaint, though some particulars will 

 be desirable. They can also be made liable under 

 Section 141(2) by making necessary averments relating 

 12

 to consent and connivance or negligence, in the 

 complaint, to bring the matter under that sub-section.

 (iv) Other officers of a company cannot be made liable 

 under sub-section (1) of Section 141. Other officers of a 

 company can be made liable only under sub-section (2) 

 of Section 141, by averring in the complaint their 

 position and duties in the company and their role in 

 regard to the issue and dishonour of the cheque, 

 disclosing consent, connivance or negligence."

13. In K.K. Ahuja4, this Court observed that if a mere 

reproduction of the wording of Section 141(1) in the complaint was 

sufficient to make a person liable to face prosecution, virtually every 

officer/employee of a company without exception could be impleaded 

as accused by merely making an averment that at the time when the 

offence was committed they were in charge of and were responsible 

to the company for the conduct and business of the company.

14. In a recent decision in the case of National Small 

Industries Corporation Limited v. Harmeet Singh Paintal and 

Another5, after survey of earlier decisions wherein legal position 

concerning Section 138 and Section 141 of the NI Act was 

considered, this Court culled out the following principles:

 "(i) The primary responsibility is on the complainant to 

 make specific averments as are required under the law 

5 2010 (3) SCC 330

 13

in the complaint so as to make the accused vicariously 

liable. For fastening the criminal liability, there is no 

presumption that every Director knows about the 

transaction.

(ii) Section 141 does not make all the Directors liable for 

the offence. The criminal liability can be fastened only 

on those who, at the time of the commission of the 

offence, were in charge of and were responsible for the 

conduct of the business of the company.

(iii) Vicarious liability can be inferred against a company 

registered or incorporated under the Companies Act, 

1956 only if the requisite statements, which are required 

to be averred in the complaint/petition, are made so as 

to make the accused therein vicariously liable for 

offence committed by the company along with 

averments in the petition containing that the accused 

were in charge of and responsible for the business of 

the company and by virtue of their position they are 

liable to be proceeded with.

(iv) Vicarious liability on the part of a person must be 

pleaded and proved and not inferred.

(v) If the accused is a Managing Director or a Joint 

Managing Director then it is not necessary to make 

specific averment in the complaint and by virtue of their 

position they are liable to be proceeded with.

(vi) If the accused is a Director or an officer of a 

company who signed the cheques on behalf of the 

company then also it is not necessary to make specific 

averment in the complaint.

(vii) The person sought to be made liable should be in 

charge of and responsible for the conduct of the 

business of the company at the relevant time. This has 

to be averred as a fact as there is no deemed liability of 

a Director in such cases."

 14

15. Every company is required to keep at its registered office 

a register of its directors, managing director, manager and secretary 

containing the particulars with respect to each of them as set out in 

clauses (a) to (e) of sub-section (1) of Section 303 of the Companies 

Act, 1956. Sub-section (2) of Section 303 mandates every company 

to send to the Registrar a return in duplicate containing the particulars 

specified in the register. Any change among its directors, managing 

directors, managers or secretaries specifying the date of change is 

also required to be furnished to the Registrar of Companies in the 

prescribed form within 30 days of such change. There is, thus, 

statutory requirement of informing the Registrar of Companies about 

change among directors of the company. In this view of the matter, in 

our opinion, it must be held that a director - whose resignation has 

been accepted by the company and that has been duly notified to the 

Registrar of Companies - cannot be made accountable and fastened 

with liability for anything done by the company after the acceptance of 

his resignation. The words `every person who, at the time the offence 

was committed', occurring in Section 141 (1) of the NI Act are not 

without significance and these words indicate that criminal liability of 

 15

a director must be determined on the date the offence is alleged to 

have been committed.

16. On March 2, 2004, the appellant sent a letter of 

resignation to the Managing Director of the Company, the relevant 

part of that reads as follows:

 "Subject : Resignation to the Post of Director

 With reference to the above subject I 

 hereby resign to the post of Director in your company 

 (sic.) immediate effect as I am pre-occupied with my 

 other business activities and unable to concentrate, 

 participate in the affairs of the company.

 Therefore it is kind request with you to 

 accept my resignation and intimate the R.O.C. by filing 

 necessary applications to comply the legal formality."

17. The Board of Directors held the meeting on March 2, 

2004 and accepted the appellant's resignation on that day itself. The 

extract of resolution to that effect reads as follows :

 "Mr. Harshendra Kumar D S/o Rathnavarma Hegde 

 residing at No. -55, Vittal Mallya Road, Bangalore. Due 

 to his personal inconivenceses (sic.) he requested to 

 accept his resignation for the Director, and the Board 

 accepted the resignation and it will be effected 

 immediately on the date of resignation." 

18. On March 4, 2004, the Company informed the Registrar 

of Companies in the prescribed form (Form no. 32) about the 

 16

resignation of the appellant from the post of Director of the Company 

and, thus, change among directors.

19. The above documents placed on record by the appellant 

have not been disputed nor controverted by the complainants. As a 

matter of fact, it was not even the case of the complainants before the 

High Court that the change among Directors of the Company, on 

resignation of the appellant with effect from March 2, 2004, has not 

taken place. The argument on behalf of the complainants before the 

High Court was that it was not permissible for the High Court to look 

into the papers and documents relating to the appellant's resignation 

since these are the matters of defence of the accused person and 

defence is a matter for consideration at the trial on the basis of 

evidence which cannot be decided by the High Court. The 

complainants in this regard relied upon a decision of Single Judge of 

that Court in the case of Fateh Chand Bhansali1 . The counsel for the 

present appellant (revision petitioner therein) on the other hand 

referred to a later decision of a Single Judge of the Calcutta High 

Court in the case of Saroj Kumar Jhunjhunwala v. State of West 

Bengal and Anr.6 wherein it was held that if before the issuance of 

cheques, the accused had resigned from the directorship, then he 

6 (2007) 1 C Cr. LR (Cal) 793

 17

cannot be held liable for the offence. Confronted with two Single 

Bench decisions of that Court in Fateh Chand Bhansali1 and Saroj 

Kumar Jhunjhunwala6, the Single Judge held that the judicial 

discipline demanded that he should go by the earlier decision, 

namely, Fateh Chand Bhansali1 and, accordingly, refused to take into 

consideration the documents relating to the appellant's resignation as 

Director from the Company with effect from March 2, 2004. While 

relying upon Fateh Chand Bhansali1, the Single Judge referred to a 

decision of this Court in State of Madhya Pradesh v. Awadh Kishore 

Gupta and Others7 which was referred in Fateh Chand Bhansali1 . 

20. In Awadh Kishore Gupta7, this Court while dealing with 

the scope of power under Section 482 of the Code observed :

 "13. It is to be noted that the investigation was not 

 complete and at that stage it was impermissible for the 

 High Court to look into materials, the acceptability of 

 which is essentially a matter for trial. While exercising 

 jurisdiction under Section 482 of the Code, it is not 

 permissible for the Court to act as if it was a trial 

 Judge.........." 

21. In our judgment, the above observations cannot be read 

to mean that in a criminal case where trial is yet to take place and the 

matter is at the stage of issuance of summons or taking cognizance, 

7 (2004) 1 SCC 691

 18

materials relied upon by the accused which are in the nature of public 

documents or the materials which are beyond suspicion or doubt, in 

no circumstance, can be looked into by the High Court in exercise of 

its jurisdiction under Section 482 or for that matter in exercise of 

revisional jurisdiction under Section 397 of the Code. It is fairly settled 

now that while exercising inherent jurisdiction under Section 482 or 

revisional jurisdiction under Section 397 of the Code in a case where 

complaint is sought to be quashed, it is not proper for the High Court 

to consider the defence of the accused or embark upon an enquiry in 

respect of merits of the accusations. However, in an appropriate 

case, if on the face of the documents - which are beyond suspicion 

or doubt - placed by accused, the accusations against him cannot 

stand, it would be travesty of justice if accused is relegated to trial 

and he is asked to prove his defence before the trial court. In such a 

matter, for promotion of justice or to prevent injustice or abuse of 

process, the High Court may look into the materials which have 

significant bearing on the matter at prima facie stage.

22. Criminal prosecution is a serious matter; it affects the 

liberty of a person. No greater damage can be done to the reputation 

of a person than dragging him in a criminal case. In our opinion, the 

 19

High Court fell into grave error in not taking into consideration the 

uncontroverted documents relating to appellant's resignation from the 

post of Director of the Company. Had these documents been 

considered by the High Court, it would have been apparent that the 

appellant has resigned much before the cheques were issued by the 

Company. As noticed above, the appellant resigned from the post of 

Director on March 2, 2004. The dishonoured cheques were issued by 

the Company on April 30, 2004, i.e., much after the appellant had 

resigned from the post of Director of the Company. The acceptance 

of appellant's resignation is duly reflected in the resolution dated 

March 2, 2004. Then in the prescribed form (Form No. 32), the 

Company informed to the Registrar of Companies on March 4, 2004 

about appellant's resignation. It is not even the case of the 

complainants that the dishonoured cheques were issued by the 

appellant. These facts leave no manner of doubt that on the date the 

offence was committed by the Company, the appellant was not the 

Director; he had nothing to do with the affairs of the Company. In this 

view of the matter, if the criminal complaints are allowed to proceed 

against the appellant, it would result in gross injustice to the appellant 

and tantamount to an abuse of process of the court.

 20

23. These appeals are, accordingly, allowed. The judgment of 

the Calcutta High Court dated September 6, 2007 and the summons 

issued by the Metropolitan Magistrate, Calcutta to the appellant are 

set aside. The complaints as against the appellant stand quashed.

 .........................J.

 (Aftab Alam)

 ........................ J.

 (R.M. Lodha) 

NEW DELHI,

FEBRUARY 8, 2011. 21
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