A director cannot be held vicariously liable for a company's actions after resignation unless specific allegations of involvement are made in the complaint.

JUDGMENT :

Ajoy Kumar Mukherjee, J.

1. The petitioner herein has been arraigned as an accused in a proceeding initiated under section 138 read with section 141 of the Negotiable Instrument Act (In short N.I. Act) being CS/27105/2021. Ld. Court below issued process against the petitioner and five other accused persons vide its order dated 23rd August, 2021.

2. Being aggrieved by the said criminal proceeding the petitioner approached before this Court for quashing the same mainly on two broad grounds

(a) The petitioner had resigned prior to the issuance of the cheque and he is also not the signatory of the cheque, nor he was associated with the affairs of the accused company at the time of issuance of cheque and as such he cannot be held liable for the acts of the company subsequent to his resignation.

(b) The role played by the petitioner has not been averred in the petition of complaint by making specific averments to that effect, specially when the petitioner in reply to opposite party’s demand notice had clearly answered that he resigned prior to the issuance of the cheque. In the above context it was necessary for the opposite party to make specific averment in the plaint as to how and it what manner the present petitioner was responsible for the conduct of the business of the accused/company at the time of commission of offence.

3. The gist of allegation made in the complaint pertains to dishonour of a cheque bearing no. 205893 dated 01.01.2021 for an amount of Rs. 25 lakhs issued by the accused company M/S Arcuttipore Tea company Ltd. towards the discharge of its existing dues/liabilities. The complainant company presented the said cheque for encashment through its banker within its validity period but the said cheque was returned dishonoured by the drawee bank with the specific remark ‘fund insufficient’ vide cheque return memo dated 6th March, 2021. The complainant company issued a demand notice dated 12.03.2021 through its advocate calling upon the accused persons to pay a sum of Rs. 25 lakhs being the amount of the said dishonored cheque within 15 days from the date of the receipt of the notice, but in spite of receipt of said notice the accused persons have failed to pay the said amount and as such the instant criminal proceeding has been instituted.

4. Mr. Talukdar Learned Counsel appearing on behalf of the petitioner submits that the petitioner has resigned as a Director from the accused company with effect from 13th March, 2020 and he had been disassociated from the affairs of the accused company from the date of 13th March, 2020, whereas the impugned cheque was issued on 1st January, 2021. He further contended that it would be apparent from the petition of complaint that the concerned cheque was not a security cheque and as such an offence under section 138 of the Act does not occur against the present petitioner. He further contended that when the alleged cause of action arose the petitioner was no longer Director of the company nor was any way connected with the said company. Infact the petitioner was not associated with the affairs of the accused company and had seized to be a Director w.e.f. 13.03.2020, which has been reflected in Form DIR-12.

5. Mr. Talukdar further contended that in view of the fact that the accused/company had failed to file relevant Form DIR-12 thereby intimating the Registrar of Companies the factum of the petitioner’s resignation, the petitioner had issued a notice to the company on 23rd February, 2021 requesting the accused company to do the needful. Pursuant to such request the petitioner’s resignation was accepted on 22nd November, 2021 w.e.f. 13th March, 2020. Subsequent to the same the accused company proceed to file the Form DIR-12 before the Registrar of Companies indicating the petitioner’s resignation w.e.f. 13th March, 2020.

6. Referring a judgment of this court passed in CRR 2680 of 2014 with CRR 2682 of 2014 and CRR 2683 of 2014 (Mahesh Prasad Merhotra Vs. Mrs. Shreye Equipment Fi