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2022 (9) TMI 792 - HC - Indian LawsDishonor of Cheque - funds insufficient - legally enforceable debt or not - vicarious liability of the directors - petitioners have resigned to the posts of Directors of company - section 138 of NI Act - HELD THAT:- This Court, on perusal of catena of decisions, is of the view that the petitioners who were the Directors of Company, but have resigned much prior to the issuance of the cheque, the question of facing criminal trial after lapse of 1½ years would be travesty of justice. It is essential that once cheque was issued for discharge of legally enforceable debt, the company as well as the persons incharge of day to day affairs of the company can be prosecuted for the dishonour of such cheque. But the same cannot be alleged as against quondam Directors, who before the issuance of cheque have resigned to the posts of Directors. The petitioners are not signatories to the cheque. Hence, directing the petitioners herein to face trial would be nothing but abuse of process of Court and same would be a futile exercise. The Criminal Petition is allowed.
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