Inside Courtroom at the Delhi High Court on a winter afternoon, a familiar argument echoed again - can a director walk away from criminal liability simply by resigning before a cheque bounces? Justice Sanjeev Narula, after hearing detailed submissions from both sides, made it clear that such questions are rarely simple.
On December 25, the High Court refused to quash multiple cheque dishonour complaints against Dinesh Kumar Pandey, a former director and cheque signatory of two borrower companies, holding that his defence of resignation raised disputed facts that must be tested at trial, not short-circuited at the threshold.
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Background
The cases stem from loans advanced by a non-banking financial company, M/s Singh Finlease Pvt. Ltd., to two private companies - South Centre of Academy Pvt. Ltd. and Sampoorn Academy Pvt. Ltd. The loans, running into crores, were to be repaid in monthly instalments.
According to the lender, several cheques issued towards repayment were returned unpaid in March 2024 with the familiar bank endorsement, “funds insufficient.” Statutory notices followed. When payment did not come within the legally prescribed time, complaints under the Negotiable Instruments Act were filed against the companies, Pandey, and other accused.
Pandey approached the High Court seeking quashing of these proceedings. His argument was straightforward on paper: he had resigned from the boards of the borrower companies months before the cheques were dishonoured. Corporate filings, including Form DIR-12 from the MCA portal, were cited to show his exit.
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Court’s Observations
The court, however, was not persuaded that the matter could be wrapped up so neatly. Justice Narula noted that under cheque bounce law, liability is not frozen to a single date. “The offence under Section 138 is a composite one,” the bench observed, explaining that it unfolds over several stages - from issuance of the cheque to dishonour, notice, and failure to pay.
What weighed against the petitioner was his admitted role. He was not just a director at the time the loans were taken; he was also the signatory on the cheques. The complaints specifically alleged that he negotiated the loans, executed documents, and signed repayment cheques.
The judge pointed out that while resignation documents may be genuine corporate records, the lender had questioned their timing and intent. “Whether these resignations reflect a genuine disengagement or a self-serving attempt to insulate from liability is itself a live factual issue,” the bench observed during the hearing.
The court also underlined that when a person signs a cheque on behalf of a company, the law presumes responsibility. That presumption, Justice Narula said, cannot be brushed aside merely by producing resignation papers, especially when the complainant alleges continued control “from behind the curtain.”
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Decision
In the end, the High Court held that the case did not fall into the narrow category where criminal proceedings can be quashed at the outset. The material placed by Pandey did not meet the “unimpeachable” standard required to halt a prosecution before trial.
“The impugned complaints disclose the basic ingredients of an offence,” the bench observed, adding that the petitioner would remain free to prove his defence before the trial court. With that, all the petitions were dismissed, leaving the cheque bounce cases to proceed in accordance with law.
Case Title: Dinesh Kumar Pandey vs M/s Singh Finlease Pvt. Ltd. & Anr.
Case No.: CRL.M.C. 8175/2025, 8176/2025, 8177/2025 & 8178/2025 (with connected applications)
Case Type: Criminal Miscellaneous Petitions (Cheque Dishonour – Section 138 NI Act)
Decision Date: 24 December 2025 (pronounced); uploaded on 25 December 2025