Case: MAHESH PRASAD MEHROTRA Vs. M/S SREI EQUIPMENT FINANCE PVT. LTD

Madan B. Lokur, J. - Leave granted. 2. The grievance of the appellant is with regard to the order dated 15.09.2014 passed by the High Court of Calcutta in CRR No. 2682/2014. 3. The appellant had sent his resignation as Director of a Company called Zylog Systems Limited on 24.06.2013. This was followed by Form 32 sent by the company to the Registrar of Companies on 27.09.2013. Form 32 clearly mentions that the appellant is no longer associated with the company from 24.06.2013. It therefore appears that his resignation was accepted from that date. 4. In the meanwhile, on 15.09.2013, certain cheques were issued by the company and those cheques bounced. 5. On the basis of these broad facts, the respondent preferred a complaint against the company and its Directors including the appellant under Section 138/141 of the Negotiable Instruments Act. 6. The appellant sought quashing of the proceedings by approaching the Calcutta High Court. The High Court vide order dated 15.09.2014 dismissed the petition filed by the appellant. 7. Against the dismissal order passed by the High Court, the appellant is now before us. 8. On perusal of the records, it is clear that the appellant had sent his resignation as a Director of the Company on 24.06.2013 and that was accepted perhaps on the very same date but in any case as disclosed in Form No. 32, the appellant was no longer associated with the affairs of the company with effect from 24.06.2013. 9. The fact that certain cheques were issued by the company subsequent to the resignation of the appellant on 15.09.2013 cannot foist any criminal liability on the appellant only because those cheques have bounced. Under these circumstances, the appellant, not being associated with the affairs of the company, cannot be held liable for the acts of the company which have resulted in a complaint being filed by the respondent.

Decision reasoning: 1[ds]8. On perusal of the records, it is clear that the appellant had sent his resignation as a Director of the Company on 24.06.2013 and that was accepted perhaps on the very same date but in any case as disclosed in Form No. 32, the appellant was no longer associated with the affairs of the company with effect from 24.06.2013.9. The fact that certain cheques were issued by the company subsequent to the resignation of the appellant on 15.09.2013 cannot foist any criminal liability on the appellant only because those cheques have bounced. Under these circumstances, the appellant, not being associated with the affairs of the company, cannot be held liable for the acts of the company which have resulted in a complaint being filed by the respondent.