What is the required averment under Section 141 NI Act to hold a Director in charge and responsible for the conduct of the company? What is the effect of a Director’s resignation on his liability under Section 141 NI Act and whether such Director can be prosecuted after resignation? When may the High Court quash a Section 138/141 complaint under Section 482 CrPC, considering the basic averment and additional evidence or circumstances?

Key Points: - The judgment holds that a complaint under Section 141 must specifically aver that the Director was in charge of and responsible for the conduct of the business at the relevant time. (!) (!) (!) - Managing Director or Joint Managing Director need not have a separate in-charge averment; their status suffices for liability under Section 141(1). (!) - For Directors who signed the cheque, liability under Section 141(2) can attach even without a specific in-charge averment. (!) - A Director who has resigned can still be prosecuted if the facts show he was in charge at the relevant time; conversely, resignation prior to cheque issuance can lead to quashing if unimpeachable evidence shows non-involvement. (!) (!) - SMS Pharma(1) remains binding guidance: specific averments about in-charge and responsible for conduct are required to proceed; otherwise, quashing may be warranted. (!) (!) (!) - The High Court may quash under 482 CrPC on an overall reading of the complaint if unimpeachable evidence or totally acceptable circumstances show no case against the Director; otherwise, process should not be quashed. (!) (!) - The Court emphasizes the balance between avoiding abuse of process and ensuring proper prosecutorial grounding for Directors in NI Act cases. (!) (!) - The decision remits certain directors’ cases to the High Court for fresh hearing with directions to decide expeditiously. (!)

What is the required averment under Section 141 NI Act to hold a Director in charge and responsible for the conduct of the company?

What is the effect of a Director’s resignation on his liability under Section 141 NI Act and whether such Director can be prosecuted after resignation?

When may the High Court quash a Section 138/141 complaint under Section 482 CrPC, considering the basic averment and additional evidence or circumstances?