Cheque Dishonour, Former Directors Cannot Be Made Liable For Cheques Issued By Company After Their Resignations Were Accepted: Rajasthan High Court

In a significant judgment, the Rajasthan High Court has clarified the liability of directors under Section 138 of the Negotiable Instruments Act, 1881, particularly focusing on those who have resigned from their positions before the issuance of dishonored cheques. The court quashed criminal proceedings against former directors Smt. Neelu Gupta and Shri Pankaj Anand Mudholkar, emphasizing that they cannot be held liable for the company's actions post-resignation. Case Overview The…