REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL NOS.360-377 OF 2011 (Arising out of SLP (Criminal) Nos. 3008-3025 of 2008)

Harshendra Kumar D. …. Appellant

      Versus  

Rebatilata Koley Etc.        ….Respondents

JUDGMENT

R.M. Lodha, J.  

Leave granted.

2. These 18 appeals, by special leave, are directed against  

the common judgment and order dated September 6, 2007 passed by  

Calcutta High Court whereby 18 criminal revision applications filed by  

the  appellant  for  quashing  the  proceedings  initiated  by  the  

1

complainants  in  18  complaint  cases  under  Section  138  read  with  

Section 141 of Negotiable Instruments Act, 1881 ( for short, ‘NI Act’)  

against him have been dismissed.

3. The  brief  facts  are  these.  The  complainants  were  

interested in business relationship with  Rifa Healthcare (India) Pvt.  

Ltd. (for short, ‘the Company’) for the sale of bio-ceramic products.  

The complainants,  for  the orders they had placed, issued demand  

drafts in favour of the Company. It appears that the Company had not  

delivered the products ordered by the complainants and accordingly  

they asked the Company for return of their money. On April 30, 2004,  

the Company issued 18 cheques bearing Nos. (i) 000843 for    Rs.  

30,000/-; (ii) 00870 for Rs. 40,000/-; (iii) 000845 for Rs. 30,000/-; (iv)  

000852 for Rs. 3,00,000/-; (v) 00842 for Rs. 60,000/-; (vi) 000862 for  

Rs.  40,000/-;  (vii)  000834  for  Rs.  60,000/-;  (viii)  000572  for  Rs.  

40,000/-;  (ix) 000827 for Rs. 30,350/-; (x) 000854 for Rs. 3,00,000/-;  

(xi)  000826  for  Rs.  60,000/-;  (xii)  000855  for  Rs.  3,00,000/-;  (xiii)  

000857  for  Rs.  3,00,000/-;  (xiv)  000858  for   Rs.  3,00,000/-;  (xv)  

000841 for Rs. 60,000/-; (xvi) 000871 for   Rs. 40,000/-;  (xvii) 000568  

for Rs. 40,000/- and (xviii) for Rs. 60,130/- drawn on UTI Bank Ltd.,  

2

Jayanagar,  Bangalore  in  favour  of  the  complainants.  These  18  

cheques were dishonoured by the Bank/s on presentation.

4. In the month of December, 2004, the complainants filed  

18 complaints under Section 138 read with Section 141 of the NI Act.  

For  the  sake  of  brevity  and  convenience,  we  shall  refer  to  the  

complaint no. 14512 of 2004. In the complaint, besides the Company,  

the appellant was arraigned as accused No. 3.  It was alleged in the  

complaint that the Managing Director and the two Directors (including  

the appellant) were responsible for day-to-day affairs of the Company  

and  that  it  was  on  their  assurance  that  the  complainant  issued  

demand draft in favour of the Company and when the products of the  

Company were not received by the complainant, she contacted the  

accused persons and told them that she could not continue business  

with them and asked for return of her money.  Accordingly, for and on  

behalf  of  the  Company,  in  discharge  of  the  existing  liability,  an  

account payee cheque was issued but the cheque was returned by  

the  complainant’s  banker  on  presentation  with  the  endorsement  

‘insufficient fund’.  The complainant then sent legal notice asking the  

accused persons to pay the amount of cheque within 15 days from  

3

the date of the receipt of the notice but despite service of notice, no  

payment has been made.  

5. The concerned Metropolitan Magistrate issued summons  

to all the accused persons including the appellant.

6. The appellant challenged the proceedings initiated by the  

complainants  against  him  by  filing  18  revision  applications  under  

Section 397 read with Section 401 of the Criminal Procedure Code,  

1973  (for  short,  `Code’)  before  the  Calcutta  High  Court.  In  these  

revision applications,  notices were issued to the complainants.  On  

behalf of the appellant, the principal contention canvassed was that  

the appellant was appointed as Director of the Company on August  

27, 2003. He resigned from the directorship on March 2, 2004 which  

was  accepted  by  the  Board  of  Directors  on  that  day  itself  with  

immediate effect.  The factum of his resignation is also recorded in  

Form No. 32 filed by the Company with the Registrar of Companies  

on March 4, 2004.  The 18 cheques which were issued on behalf of  

the Company to the complainants were issued after his resignation.  

The dishonour of these cheques through the complainants’ bankers’  

was  also  subsequent  to  his  resignation.  In  other  words,  it  was  

submitted by the counsel for the appellant before High Court that at  

4

the time when the cheques were issued or when the cheques were  

dishonoured,  the appellant  had no concern or  connection with  the  

Company.  

7. The  High  Court,  however,  relying  upon  a  decision  of  

Single  Judge  of  that  Court  in  Fateh  Chand  Bhansali v.  M/s.  

Hindustan Development  Corporation Ltd.1,  held that  resignation by  

the  petitioner   as  Director  of  the  Company  is  a  defence  of  the  

accused and the defence is a matter for consideration at the trial on  

the  basis  of  evidence  which  cannot  be  decided  by  the  Court  in  

revisional jurisdiction. The High Court considered the matter thus:

“The question of the learned Advocate for the petitioner  is that the petitioner was not director of a company at  the  material  point  of  time  because  there  is  form  32  which  shows  the  date  when  the  petitioner  was  appointed  a  director  and  when  there  came  to  be  a  change of directorship of the company. According to Mr.  Trivedi  learned Advocate  for  the  petitioner,  a  Hon’ble  Judge of this Court in Saroj  Kumar Jhunjhunwala  Vs.  State of West Bengal and Anr. (2007) 1 C Cr.LR (Cal)  793 was pleased to hold that if before the issuance of  cheques, the accused-petitioner had resigned from the  directorship,  then  he  cannot  be  held  liable  for  the  offence. This decision which favours the petitioner has  been  pitted  against  the  decision  in  Fateh  Chand  Bhansali Vs. M/s. Hindustan Development Corporation  Ltd.,  (2005)  1  C  Cr.  LR  (Cal)  581  wherein  another  Hon’ble Single Judge of this court with reference to a  good  number  of  decisions  including  the  decision  in  State of M.P. Vs. Awadh Kishore Gupta & Ors., 2004  

1 (2005) 1 C Cr.LR (Cal) 581

5

SCC  (Cr.)  352  held  that  the  High  Court  while  considering the revisional  application cannot  look into  the papers and documents annexed to such application  as  those  were  neither  verified  nor  tested.  In  that  decision also the point was raised with reference to form  32 and His Lordship held that the decision of State of  M.P. Vs. Awadh Kishore Gupta and Ors. (Supra) is an  authority  regarding  permissibility  of  the  High  Court  to  look  into  the  papers  and  documents  annexed  to  the  revisional application and the story of the petitioner that  they resigned from the company by submitting Form 32  and are, in no way, responsible for the alleged offence  is a defence of the accused person and the defence is a  matter  for  consideration  at  the  trial  on  the  basis  of  evidence which  cannot  be decided by the court.  It  is  worth  mentioning  that  this  decision  in  Fateh  Chand  Bhansali was rendered on 23.3.2005 while the decision  in  Saroj  Kumar  Jhunjhunwala  was  rendered  on  05.04.2007 and in this decision Fateh Chand Bhansali  was  not  placed  before  his  Lordship  for  consideration  and judicial discipline demands that I should go by the  earlier  decision,  namely,  Fateh  Chand  Bhansali  (Supra).”  

8. Section 138 and Section 141 were brought in the NI Act  

by  the  Banking,  Public  Financial  Institutions  and  Negotiable  

Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988) with effect  

from April 1,  1989.  These provisions as amended from time to time  

read as under :

“S.138.  Dishonour  of  cheque for  insufficiency,  etc.,  of  funds in the accounts.—Where any cheque drawn by a  person on an account maintained by him with a banker  for payment of any amount of money to another person  

6

from out of that account for the discharge, in whole or in  part,  of  any  debt  or  other  liability,  is  returned  by  the  bank unpaid,  either because of the amount of  money  standing to the credit  of  that account is insufficient  to  honour  the  cheque  or  that  it  exceeds  the  amount  arranged to be paid from that account by an agreement  made with that bank, such person shall be deemed to  have committed an offence and shall without prejudice  to  any other  provisions  of  this  Act,  be  punished with  imprisonment for a term which may extend to two years,  or with fine which may extend to twice the amount of the  cheque, or with both:

Provided  that  nothing  contained  in  this  section  shall apply unless—

(a) The cheque has been presented to the bank within a  period of six months from the date on which it is drawn  or within the period of its validity, whichever is earlier;

(b)  The  payee  or  the  holder  in  due  course  of  the  cheque, as the case may be, makes a demand for the  payment of the said amount of money by giving a notice  in writing, to the drawer of the cheque, within thirty days  of  the  receipt  of  information  by  him  from  the  bank  regarding  the  return  of  the  cheque  as  unpaid;  and

(c)  The  drawer  of  such  cheque  fails  to  make  the  payment of the said amount of money to the payee or,  as the case may be, to the holder in due course of the  cheque,  within  fifteen days  of  the  receipt  of  the  said  notice.  

Explanation.—For the purposes of this section, "debt or  other liability" means a legally enforceable debt or other  liability.

S.  141.  Offences  by  companies.—(1)  If  the  person  committing an offence under section 138 is a company,  every  person  who,  at  the  time  the  offence  was  committed, was in charge of, and was responsible to the  company  for  the  conduct  of  the  business  of  the  company, as well as the company, shall be deemed to  

7

be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded against and punished accordingly:  

Provided that nothing contained in this sub-section shall  render any person liable to punishment if he proves that  the offence was  committed without  his  knowledge,  or  that he had exercised all due diligence to prevent the  commission of such offence:

Provided further that where a person is nominated as a  Director of a company by virtue of his holding any office  or  employment  in  the  Central  Government  or  State  Government  or  a  financial  corporation  owned  or  controlled  by  the  Central  Government  or  the  State  Government, as the case may be, he shall not be liable  for prosecution under this Chapter.   (2) Notwithstanding  anything  contained  in  sub-section  (1),  where  any  offence  under  this  Act  has  been  committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or  connivance of, or is attributable to, any neglect on the  part of, any director, manager, secretary or other officer  of  the company,  such director,  manager,  secretary or  other officer shall also be deemed to be guilty of that  offence and shall be liable to be proceeded against and  punished accordingly.

Explanation.—For the purposes of this section,—

(a) "company" means any body corporate and includes  a firm or other association of individuals; and  

(b) "director", in relation to a firm, means a partner in the  firm.]

 9. The legal  position concerning the vicarious liability  of  a  

director in a company which is being prosecuted for the offence under  

Section 138, NI Act has come up for consideration before this Court  

8

on more than one occasion. In the case of  S.M.S. Pharmaceuticals  

Ltd. v.  Neeta  Bhalla  and  Another2,  the  following  questions  were  

referred to a 3-Judge Bench for determination :

“(a)  Whether  for  purposes  of  Section  141  of  the  Negotiable Instruments Act,  1881, it  is sufficient if  the  substance of  the allegation read as a whole  fulfil  the  requirements of the said section and it is not necessary  to  specifically  state  in  the  complaint  that  the  person  accused  was  in  charge  of,  or  responsible  for,  the  conduct of the business of the company.

b) Whether a director of a company would be deemed  to be in charge of, and responsible to, the company for  conduct of the business of the company and, therefore,  deemed to be guilty of the offence unless he proves to  the contrary.

(c)  Even  if  it  is  held  that  specific  averments  are  necessary, whether in the absence of such averments  the  signatory  of  the  cheque  and  or  the  managing  directors  or  joint  managing  director  who  admittedly  would be in charge of the company and responsible to  the  company  for  conduct  of  its  business  could  be  proceeded against.”

10. The 3-Judge Bench of this Court answered the aforesaid  

questions thus:

“(a)  It  is  necessary to specifically aver in a complaint  under  Section  141  that  at  the  time  the  offence  was  committed, the person accused was in charge of, and  responsible for the conduct of business of the company.  This  averment  is  an  essential  requirement  of  Section  141 and has to be made in a complaint.  Without this  

2 2005 (8) SCC 89

9

averment being made in a complaint, the requirements  of Section 141 cannot be said to be satisfied.

(b) The answer to the question posed in sub-para (b)  has to be in the negative. Merely being a director of a  company  is  not  sufficient  to  make  the  person  liable  under Section 141 of the Act. A director in a company  cannot be deemed to be in charge of and responsible to  the  company  for  the  conduct  of  its  business.  The  requirement of Section 141 is that the person sought to  be made liable should be in charge of and responsible  for the conduct of the business of the company at the  relevant time. This has to be averred as a fact as there  is no deemed liability of a director in such cases.

(c)  The  answer  to  Question  (c)  has  to  be  in  the  affirmative.  The  question  notes  that  the  managing  director or joint managing director would be admittedly  in  charge  of  the  company  and  responsible  to  the  company for the conduct of its business. When that is  so,  holders  of  such  positions  in  a  company  become  liable  under  Section  141  of  the  Act.  By  virtue  of  the  office they hold as managing director or joint managing  director, these persons are in charge of and responsible  for the conduct of business of the company. Therefore,  they  get  covered  under  Section  141.  So  far  as  the  signatory  of  a  cheque  which  is  dishonoured  is  concerned, he is clearly responsible for the incriminating  act and will be covered under sub-section (2) of Section  141.”

11. In  N.  Rangachari v.  Bharat  Sanchar  Nigam Ltd.3,  a 2-

Judge  Bench  of  this  Court  discussed  and  considered  S.M.S.  

Pharmaceuticals Ltd.2  and observed as follows :

“…….The  scope  of  Section  141  has  been  authoritatively  discussed  in  the  decision  in  S.M.S.  

3 2007 (5) SCC 108

10

Pharmaceuticals Ltd.  [2005 (8) SCC 89] binding on us  and  there  is  no  scope  for  redefining  it  in  this  case.  Suffice it to say, that a prosecution could be launched  not  only against  the company on behalf  of  which the  cheque issued has been dishonoured, but it could also  be initiated against  every person who at  the time the  offence  was  committed,  was  in  charge  of  and  was  responsible  for  the  conduct  of  the  business  of  the  company. In fact, Section 141 deems such persons to  be guilty of such offence, liable to be proceeded against  and punished for the offence, leaving it  to the person  concerned, to prove that the offence was committed by  the  company  without  his  knowledge  or  that  he  has  exercised due diligence to prevent  the commission of  the offence. Sub-section (2) of Section 141 also roped  in Directors, Managers, Secretaries or other officers of  the  company,  if  it  was  proved  that  the  offence  was  committed with their consent or connivance.

………………………………………………………………………

But as has already been noticed, the decision in S.M.S.  Pharmaceuticals Ltd. [2005 (8) SCC 89] binding on us,  has postulated that a Director in a company cannot be  deemed  to  be  in  charge  of  and  responsible  to  the  company for the conduct of his business in the context  of  Section  141 of  the  Act.  Bound  as  we are  by  that  decision no further discussion on this aspect appears to  be warranted.”

12. In the case of  K.K. Ahuja v.  V.K. Vora & Another.4, a 2-

Judge Bench of this Court had an occasion to consider the earlier  

decisions of this Court including the decision in the case of  S.M.S.  

Pharmaceuticals Ltd.2   It was held that mere fact that at some point of  

time an officer of a company had played some role in the financial  

4 (2009) 10 SCC 48

11

affairs  of  the  company,  that  will  not  be  sufficient  to  attract  the  

constructive  liability  under  Section  141  of  the  NI  Act.  The  Court  

summarized the legal position as follows:  

“(i) If  the accused is the Managing Director or a Joint  Managing  Director,  it  is  not  necessary  to  make  an  averment in the complaint that he is in charge of, and is  responsible  to  the  company,  for  the  conduct  of  the  business of the company. It is sufficient if an averment  is made that the accused was the Managing Director or  Joint  Managing  Director  at  the  relevant  time.  This  is  because  the  prefix  “Managing”  to  the  word  “Director”  makes  it  clear  that  they  were  in  charge  of  and  are  responsible  to  the  company,  for  the  conduct  of  the  business of the company.

(ii) In the case of a Director or an officer of the company  who signed the cheque on behalf of the company, there  is no need to make a specific averment that he was in  charge of and was responsible to the company, for the  conduct of the business of the company or make any  specific  allegation  about  consent,  connivance  or  negligence. The very fact that the dishonoured cheque  was  signed by him on behalf  of  the company,  would  give  rise  to  responsibility  under  sub-section  (2)  of  Section 141.

(iii) In the case of a Director, secretary or manager as  defined  in  Section  2(24)  of  the  Companies  Act  or  a  person referred to in clauses (e) and (f) of Section 5 of  the Companies Act, an averment in the complaint that  he  was  in  charge  of,  and  was  responsible  to  the  company,  for  the  conduct  of  the  business  of  the  company is necessary to bring the case under Section  141(1)  of  the  Act.  No  further  averment  would  be  necessary in the complaint, though some particulars will  be  desirable.  They  can  also  be  made  liable  under  Section 141(2) by making necessary averments relating  

12

in the complaint so as to make the accused vicariously  liable.  For  fastening  the  criminal  liability,  there  is  no  presumption  that  every  Director  knows  about  the  transaction.

(ii) Section 141 does not make all the Directors liable for  the offence. The criminal liability can be fastened only  on  those  who,  at  the  time  of  the  commission  of  the  offence, were in charge of and were responsible for the  conduct of the business of the company.

(iii) Vicarious liability can be inferred against a company  registered  or  incorporated  under  the  Companies  Act,  1956 only if the requisite statements, which are required  to be averred in the complaint/petition, are made so as  to  make  the  accused  therein  vicariously  liable  for  offence  committed  by  the  company  along  with  averments  in  the petition  containing that  the accused  were in charge of and responsible for the business of  the  company  and  by  virtue  of  their  position  they  are  liable to be proceeded with.

(iv) Vicarious liability on the part of a person must be  pleaded and proved and not inferred.

(v)  If  the  accused  is  a  Managing  Director  or  a  Joint  Managing  Director  then  it  is  not  necessary  to  make  specific averment in the complaint and by virtue of their  position they are liable to be proceeded with.

(vi)  If  the  accused  is  a  Director  or  an  officer  of  a  company  who  signed  the  cheques  on  behalf  of  the  company then also it is not necessary to make specific  averment in the complaint.

(vii) The person sought to be made liable should be in  charge  of  and  responsible  for  the  conduct  of  the  business of the company at the relevant time. This has  to be averred as a fact as there is no deemed liability of  a Director in such cases.”

14

15. Every company  is required to keep at its registered office  

a register of its directors, managing director, manager and secretary  

containing the particulars with respect to each of  them  as  set  out in  

clauses (a) to (e) of sub-section (1) of Section 303 of the Companies  

Act, 1956.  Sub-section (2) of Section 303 mandates every company  

to send to the Registrar a return in duplicate containing the particulars  

specified in the register. Any change among its directors, managing  

directors, managers or secretaries specifying the date of change is  

also required to be furnished to the Registrar of Companies in the  

prescribed  form  within  30  days  of  such  change.  There  is,  thus,  

statutory requirement of informing the Registrar of Companies about  

change among directors of the company. In this view of the matter, in  

our opinion, it must be held that a director - whose resignation has  

been accepted by the company and that has been duly notified to the  

Registrar of Companies - cannot be made accountable and fastened  

with liability for anything done by the company after the acceptance of  

his resignation. The words ‘every person who, at the time the offence  

was committed’, occurring in Section 141 (1) of the NI Act are not  

without significance and these words indicate that criminal liability of  

15

a director must be determined on the date the offence is alleged to  

have been committed.

16. On  March  2,  2004,  the  appellant  sent  a  letter  of  

resignation to the Managing Director of the Company, the relevant  

part of that reads as follows:

“Subject : Resignation to the Post of Director

With  reference  to  the  above  subject  I  hereby resign to the post of Director in your company  (sic.) immediate  effect  as  I  am pre-occupied with  my  other  business  activities  and  unable  to  concentrate,  participate in the affairs of the company.

Therefore  it  is  kind  request  with  you  to  accept my resignation and intimate the R.O.C. by filing  necessary applications to comply the legal formality.”

  17. The  Board  of  Directors  held  the  meeting  on  March  2,  

2004 and accepted the appellant’s resignation on that day itself. The  

extract of resolution to that effect reads as follows :

“Mr.  Harshendra  Kumar  D  S/o  Rathnavarma  Hegde  residing at No. -55, Vittal Mallya Road, Bangalore. Due  to  his  personal  inconivenceses  (sic.) he  requested to  accept his resignation for the Director,  and the Board  accepted  the  resignation  and  it  will  be  effected  immediately on the date of resignation.”  

18. On March 4, 2004, the Company informed the Registrar  

of  Companies  in  the  prescribed  form  (Form  no.  32)  about  the  

16

resignation of the appellant from the post of Director of the Company  

and, thus, change among directors.

19. The above documents placed on record by the appellant  

have not been disputed nor controverted by the complainants. As a  

matter of fact, it was not even the case of the complainants before the  

High Court  that  the  change among Directors  of  the  Company,  on  

resignation of the appellant with effect from March 2, 2004, has not  

taken place. The argument on behalf of the complainants before the  

High Court was that it was not permissible for the High Court to look  

into the papers and documents relating to the appellant’s resignation  

since these are the matters of defence of the accused person and  

defence  is  a  matter  for  consideration  at  the  trial  on  the  basis  of  

evidence  which  cannot  be  decided  by  the  High  Court.  The  

complainants in this regard relied upon a decision of Single Judge of  

that Court in the case of  Fateh Chand Bhansali1 . The counsel for the  

present  appellant  (revision  petitioner  therein)  on  the  other  hand  

referred to a later decision of a Single Judge of the Calcutta High  

Court  in  the  case of  Saroj  Kumar  Jhunjhunwala v.  State  of  West  

Bengal and Anr.6 wherein it was held that if before the issuance of  

cheques,  the accused had resigned from the directorship,  then he  6 (2007) 1 C Cr. LR (Cal) 793

17

cannot  be  held  liable  for  the  offence.  Confronted  with  two  Single  

Bench decisions of that Court in  Fateh Chand Bhansali1  and  Saroj   

Kumar  Jhunjhunwala6,  the  Single  Judge  held  that  the  judicial  

discipline  demanded  that  he  should  go  by  the  earlier  decision,  

namely, Fateh Chand Bhansali1 and, accordingly, refused to take into  

consideration the documents relating to the appellant’s resignation as  

Director  from the Company with  effect  from March 2,  2004.  While  

relying upon  Fateh Chand Bhansali1,  the Single Judge referred to a  

decision of this Court in State of Madhya Pradesh v. Awadh Kishore  

Gupta and Others7 which was referred in Fateh Chand Bhansali1 .  

20. In  Awadh Kishore Gupta7,  this Court  while dealing with  

the scope of power under Section 482 of the Code observed :

“13. It  is  to  be  noted  that  the  investigation  was  not  complete and at that stage it was impermissible for the  High  Court  to  look  into  materials,  the  acceptability  of  which is essentially a matter for trial. While exercising  jurisdiction  under  Section  482  of  the  Code,  it  is  not  permissible  for  the  Court  to  act  as  if  it  was  a  trial  Judge……….”  

21. In our judgment, the above observations cannot be read  

to mean that in a criminal case where trial is yet to take place and the  

matter is at the stage of issuance of summons or taking cognizance,  

7 (2004) 1 SCC 691

18

materials relied upon by the accused which are in the nature of public  

documents or the materials which are beyond suspicion or doubt, in  

no circumstance, can be looked into by the High Court in exercise of  

its  jurisdiction  under  Section  482  or  for  that  matter  in  exercise  of  

revisional jurisdiction under Section 397 of the Code. It is fairly settled  

now that while exercising inherent jurisdiction under Section 482 or  

revisional jurisdiction  under Section 397 of the Code in a case where  

complaint is sought to be quashed, it is not proper for the High Court  

to consider the defence of the accused or embark upon an enquiry in  

respect of merits of the accusations.   However, in an  appropriate  

case, if on the face  of the documents –  which are beyond suspicion  

or doubt – placed by accused, the accusations against him cannot  

stand, it would be travesty of justice if accused is  relegated to trial  

and he is asked to prove his defence before the trial court.  In such a  

matter,  for promotion of justice or to prevent injustice or abuse of  

process,  the  High Court  may look into   the  materials  which  have  

significant bearing on the matter  at prima facie stage.

22. Criminal  prosecution  is  a  serious  matter;  it  affects  the  

liberty of a person.  No greater damage can be done to the reputation  

of a person than dragging him in a criminal case.  In our opinion, the  

19

High Court fell  into grave error in not taking into consideration the  

uncontroverted documents relating to appellant’s resignation from the  

post  of  Director  of  the  Company.  Had  these  documents  been  

considered by the High Court, it would have been apparent that the  

appellant has resigned much before the cheques were issued by the  

Company. As noticed above, the appellant resigned from the post of  

Director on March 2, 2004. The dishonoured cheques were issued by  

the Company on April  30, 2004, i.e.,  much after the appellant had  

resigned from the post of Director of the Company. The acceptance  

of  appellant’s  resignation  is  duly  reflected  in  the  resolution  dated  

March  2,  2004.  Then  in  the  prescribed  form  (Form  No.  32),  the  

Company informed to the Registrar of Companies on March 4, 2004  

about  appellant’s  resignation.  It  is  not  even  the  case  of  the  

complainants  that  the  dishonoured  cheques  were  issued  by  the  

appellant. These facts leave no manner of doubt that on the date the  

offence was committed by the Company, the appellant was not the  

Director; he had nothing to do with the affairs of the Company. In this  

view of the matter, if the criminal complaints are allowed to proceed  

against the appellant, it would result in gross injustice to the appellant  

and tantamount to an abuse of process of the court.

20

23. These appeals are, accordingly, allowed. The judgment of  

the Calcutta High Court dated September 6, 2007 and the summons  

issued by the Metropolitan Magistrate, Calcutta to the appellant are  

set aside. The complaints as against the appellant stand quashed.

  …………………….J.            (Aftab Alam)

    ….……………….. J.           (R.M. Lodha)  NEW DELHI, FEBRUARY  8, 2011.

21