In Brief
D.B. Negandhi, a director who resigned from Cauvery Software Engineering Systems Ltd. in 1997 (with resignation duly communicated to the Registrar of Companies), was prosecuted in 2005 for the company's failure to file financial statements before an AGM. The High Court rejected his petition to quash proceedings. The Supreme Court allowed his appeal, holding that a director cannot be prosecuted for corporate defaults occurring after validly communicating his resignation. The Court noted that similar complaints against Negandhi for post-resignation defaults had already been quashed, and continuing prosecution amounted to harassment.
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