Resignation from a company before the issuance of dishonored cheques can absolve an authorized signatory from criminal liability under Section 138 of the Negotiable Instrument Act.

1. It is the case of the petitioner that the 1st respondent herein filed a private complaint against the petitioner and the respondents 2 to 4 herein under Section 138 of the Negotiable Instrument Act, 1881, wherein the petitioner was arrayed as 2nd accused. According to the complainant/1st respondent herein, the 1st accused namely M/s. Chaya Knitting Ltd. is a public Ltd., company, the accused 2 and 3 are its authorized signatories, the 4th accused is the Managing Director and the 5th accused is the Director and they are responsible persons for the conduct and day to day affairs of the said company. The accused had credits with the complainant by way of Hosiery Yarn. In the said business transaction the accused have to pay a sum of Rs.59,02,620/- to the complainant. For the above said amount due, the accused No. 2 & 3 have jointly signed and issued 3 cheques bearing Nos.021117, 021144, 021145 all dated 21.05.2005 for Rs.59,02,620/- payable to the complainant, on behalf of accused No.1, with the consent of accused No.4 & 5.

2. The further case of the complainant/1st respondent herein is that the above said cheques were presented by her for collection was returned with an endorsement PAYMENTS STOPPED BY THE DRAWER. Hence she filed the above said complaint and the same was taken on file in C.C.No.482 of 2006 by the Learned Judicial Magistrate No.1, Tirupur. Challenging the same the petitioner herein/2nd accused is before this Court by way of this quash petition under Section 482 of Cr.P.C.

3. It is the case of the petitioner that he was appointed as Marketing Manager in the 1st accused company namely M/s. Chaya Knitting Ltd. The petitioner was employed as an employee and was working for salary and has nothing to do with the business of the 1st accused company except signing the cheque as authorized signatory. In fact the petitioner resigned from the 1st accused company on 30.12.2004 itself and his resignation was also accepted and he was relived from the office on 30.12.2004 itself. The disputed cheque was issued to the 1st respondent herein only after the resignation of the petitioner and therefore he cannot be fastened with criminal liability for the issuance of alleged cheques. Further at the time of issuance of cheque the petitioner was not in-charge of and responsible for the conduct and affairs of the 1st accused company. Therefore, the offence under Section 138 of the Negotiable Instruments Act as against the petitioner is not maintainable and it would not constitute any offence and so it is liable to be quashed.

4. The other contention of the petitioner is that the signatures of the petitioner in the alleged cheques itself was fabricated one even after he was relieved from the service. The complaint against the petitioner has not fulfilled the terms and tenor of the Section 141 of Negotiable Instrument Act. Hence for all the above reasons, the petitioner prays to quash the above C.C.

5. I have heard M/s. A.B. Fathima Sulthana, learned counsel for the petitioner and Mr. R. Baskar, learned counsel for the 1st respondent and perused the records.

6. It is the first and foremost contention of the Learned Counsel for the Petitioner is that he was only an employee of the 1st accused company and was working for salary and therefore he has nothing to do with the business of the 1st accused company. That apart at the time of issuance of alleged cheques he was not the employee of the 1st accused company, since he resigned from the post on 30.12.2004 itself and the alleged cheques dated was 21.05.2005. Hence the petitioner was never in-charge of and responsible for the day to day conduct of the business of the 1st accused company.

7. The other contention of the Learned Counsel for the petitioner is that even assuming without admitting the fact that he was working at the time of issuance of cheque, Section 141 second provisio clause would apply to his case which is reads as follows:

141. Offences by companies:-

(i) [Provided furthe