Resigned Directors Not Liable for Cheques Issued After Resignation: Supreme Court

The Supreme Court ruled that a director cannot be held liable under Section 141 of the Negotiable Instruments Act, 1881, for cheques issued by the company after their resignation.

The appellant, who resigned on 21.06.2019, challenged the Himachal Pradesh HC's decision refusing to quash a cheque dishonour case. The cheques, dated 12.07.2019, were issued post-resignation.

The Court noted liability under Section 141 requires involvement with the company at the time of cheque issuance. 

Rejecting the respondents' reliance on Malva Cotton v. Virsa Singh Sidhu (2008), the Court held that making the appellant face trial under Section 138 would misuse the process of law.

The appeal was allowed, and proceedings were quashed.