IMPORTANT POINT
Directors can be held liable for offenses under the Negotiable Instruments Act if they are in charge of the company's affairs at the time of the offense, regardless of their resignation, unless they can prove they had no involvement in the company's operations.

JUDGMENT/ORDER

1. The petitioner challenges the order dated 23.10.2017 passed by learned Metropolitan Magistrate, 23rd Court, Esplanade, Mumbai and order dated 06.12.2021 passed by Sessions Court in Criminal Revision Application No.1332 of 2019.

2. The Petitioner is facing proceedings under Section 138 of the Negotiable Instruments Act initiated by respondent No.1 filed in CC No.2305627/SS/2016 before the Court of learned Metropolitan Magistrate, 23rd Court at Esplanade, Mumbai. The petitioner was arraigned as accused No.2. The complainant has alleged that accused No.1 is Private Limited Company. The accused Nos.2 to 5 and 8 are Directors of accused No.1. They looked after day to day business of accused No.1. The accused Nos. 6 and 7 are signatories to the cheques which are dishonoured. Accused Nos.6 and 7 are responsible for the day to day activities and business affairs of the accused No.1. The complainant executed sales contracts with Anil Limited for supply of Maize. Various invoices were raised from time to time towards supply of maize. The complainant delivered goods in terms of contracts from time to time and the same were received without any protest. As per terms and conditions of the contracts, there was a credit period of 90 days and the post dated cheques (PDC) were to be offered as security for payments under the invoices raised. The accused No.1 handed over post dated cheques. Sum of Rs.7,94,70,512/- was due and payable to the complainant. Some of the cheques when presented for payment were not honoured for reasons of 'Insufficient Funds'. Notice dated 25.07.2016 was issued by the complainant to the accused under Section 138 of Negotiable Instruments Act. Assurances were given by accused No. 2 to 7 and also by Directors and Promoters of accused No.1. The accused as well as Directors and promoters of accused No.1 has requested to settle the dispute by entering into a Memorandum of Understanding (MOU) and accordingly MOU dated 28.07.2016 was executed between accused No.1 and complainant. In the MOU, accused No.1 accepted the liability to pay outstanding of Rs.7,81,99,695/- to complainant towards contracts. In terms of MOU, the accused No.1 issued post dated cheques. The cheques were forwarded by accused No.1 vide letter dated 02.08.2016. The said letter acknowledges the MOU and liabilities. The accused Nos. 1 to 5 vide their advocate's letter dated 19.08.2016 replied to the notice dated 25.07.2016 requesting that the notice be withdrawn in view of MOU. The said letter does not deny any payment obligations and admits liability. Accused No.1 issued various cheques as per MOU amounting to Rs.1,81,99,690/-. The cheque bearing No.242884 for an amount of Rs.50,00,000/- was issued on 17.10.2016. It was deposited by complainant on 20.10.2016. It was dishonoured with return memo dated 20.10.2016. Cheque No.242885 for an amount of Rs. 50,00,000/- was issued on 17.10.2016. It was deposited by complainant on 20.10.2016 and it was dishonoured by return memo dated 20.10.2016. Cheque No.242886 for an amount of Rs.50,58,590/- was issued on 25.10.2016. It was deposited by complainant on 26.10.2016 and it was dishonoured by return memo dated 26.10.2016. Cheque No.242887 for an amount of Rs.31,41,100/- was issued on 25.10.2016. It was deposited by complainant on 26.10.2016 and it was dishonoured by return memo dated 26.10.2016. The accused have specifically admitted and accepted the liabilities arising out of the contracts and the MOU. All the accused were instrumental in holding meetings and calls with the complainant pursuant to which the MOU was executed. Thus, each of the accused are Directors / Officers /Incharge of and responsible to accused No.1 for day to day affairs of Company and its business. Notice dated 17.11.2016 was issued to accused under Section 138 of the Negotiable Instruments Act, to make payment of Rs. 1,81,99,690/-. The notice was received by accused. Some of the accused had replied. Accused No.5 replied the notic