2025 (1) TMI 1432 - HC - Indian Laws

Dishonour of cheque - petitioner arraigned as an accused in a proceeding initiated u/s 138 read with section 141 of the Negotiable Instrument Act - petitioner resigned from the company before the issuance of the cheque - complaint lacked specific allegations - HELD THAT - In NARENDER KUMAR SURI AND OTHERS VERSUS M/S NARENDRA POLYMERS PVT. LTD. 2014 (10) TMI 1084 - PUNJAB AND HARYANA HIGH COURT a Single Bench of Punjab and Haryana High Court held that the Director of Public Limited Company or Private Ltd. Company can tender his resignation unilaterally and without filing in Form 32 and without sending a notice to Registrar of Companies. Filing in of said Form and giving of due intimation and information to Registrar of Companies is duty of company secretary and not of an individual director. it is for the company secretary to fill in forms as prescribed and to give due information and intimation to the ROC as the law requires and thereafter to be so mentioned in all the prescribed registers of company accounts and balance sheet of company and thereafter the said fact is to be brought to the notice of the members of the company as early as possible and at the latest in annual general meeting. Section 168 (2) of the Companies Act 2013 also provides that the resignation of a director shall take effect from the date on which the notice is received by the company or the date if any specified by the director in the notice whichever is later. In the present case from the supplementary affidavit filed by the petitioner it further discloses that the letter of resignation was sent through speed post on 14.03.2020 and it was delivered to the accused company on 16.03.2020 - Proviso to section 168 (1) states that a director may also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within 30 days of resignation but this proviso is not mandatory. A resignation cannot be treated as not accepted by the Company simply because Director had not sent the copy of resignation to the Registrar within 30 days. Similarly even after tendering resignation and the company even after receiving the same if does not call meeting for its acceptance that also beyond the control of the petitioner and the petitioner cannot be held responsible for the same. It is settled law that putting the criminal law into motion is not a matter of course or to settle the scores between the parties. Courts cannot be a mere spectator to it. Before a magistrate taking cognizance of an offence under section 138/141 of the N.I. Act making a person vicariously liable has to ensure strict compliance with the statutory requirement. In the aforesaid factual backdrop and the legal position as stated above continuation of the proceeding quo the petitioner will clearly be an abuse of process of the court. Conclusion - The petitioner was not liable under Section 138/141 of the N.I. Act due to his resignation prior to the cheque issuance and the lack of specific allegations in the complaint. Application allowed.

Summary

The petitioner was charged under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, for the dishonor of a cheque issued by a company. The petitioner sought to quash the proceedings on two primary grounds: first, that he had resigned from the company before the issuance of the cheque and was not involved in the company's affairs at that time; second, that the complaint lacked specific allegations against him, failing to demonstrate his role in the company's business at the time of the alleged offense.

The legal framework involves Section 138 of the Negotiable Instruments Act, which deals with the offense of cheque dishonor, and Section 141, which pertains to offenses by companies, holding individuals responsible if they were in charge of and responsible for the conduct of the business at the time of the offense. The petitioner argued that he resigned on March 13, 2020, as evidenced by Form DIR-12, which was later filed by the company. The complaint alleged that the cheque was issued on January 1, 2021, and dishonored on March 6, 2021, after the petitioner's resignation. The petitioner contended that he was not the signatory of the cheque and had no involvement in the company's affairs post-resignation.

The petitioner cited various precedents, including a Supreme Court decision, which emphasized the significance of the resignation date as per Form DIR-12 in determining a director's disassociation from a company. The petitioner argued that the effective date of resignation should be considered as March 13, 2020, based on Form DIR-12, and hence, he could not be held liable for the actions of the company after that date.

The opposite party argued that the resignation was only accepted on November 22, 2021, and the Form DIR-12 was uploaded thereafter. They contended that the petitioner remained liable until the acceptance of his resignation and the filing of Form DIR-12, which occurred after the alleged offense. They further argued that the petitioner failed to comply with the requirement of notifying the Registrar of Companies within 30 days of resignation.

The Court examined the evidence and arguments presented. It noted that the petitioner had tendered his resignation on March 13, 2020, as indicated in Form DIR-12. The Court found no evidence to suggest that the petitioner was involved in the company's affairs post-resignation. It emphasized that for vicarious liability under Section 141 of the N.I. Act, there must be specific allegations showing how the accused was responsible for the conduct of the company's business at the time of the offense. The Court found that the complaint lacked such specific allegations against the petitioner.

The Court referred to Section 168(2) of the Companies Act, 2013, which states that a director's resignation takes effect from the date specified in the notice or the date the notice is received by the company, whichever is later. The Court noted that the resignation was tendered and received by the company on March 16, 2020, and the petitioner had no control over the company's delay in filing Form DIR-12. The Court also referenced a previous decision by a coordinate bench, which quashed similar proceedings against the petitioner based on the effective date of resignation.

The Court concluded that the petitioner could not be held liable for the company's actions after his resignation, as there was no evidence of his involvement in the company's affairs post-resignation. The Court held that the continuation of proceedings against the petitioner would constitute an abuse of the judicial process, as the complaint failed to meet the statutory requirements for establishing vicarious liability under Section 141 of the N.I. Act.

Consequently, the Court allowed the petition and quashed the proceedings against the petitioner, emphasizing the importance of specific allegations and evidence in establishing liability under the Negotiable Instruments Act.