{"id":392179,"date":"2026-08-03T14:00:46","date_gmt":"2026-08-03T08:30:46","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=392179"},"modified":"2026-08-03T13:07:23","modified_gmt":"2026-08-03T07:37:23","slug":"raj-hc-former-school-principal-not-liable-under-s-138-ni-act-after-resignation","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/08\/03\/raj-hc-former-school-principal-not-liable-under-s-138-ni-act-after-resignation\/","title":{"rendered":"No greater damage to reputation than a criminal case: Rajasthan HC quashes S. 138, NI Act case against School Principal who resigned before the Cheque was signed"},"content":{"rendered":"
\n

Disclaimer:<\/span> This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.<\/span><\/p>\n

Rajasthan High Court:<\/span> While considering a petition challenging the validity of an order passed by the Additional Chief Judicial Magistrate by which cognizance was taken under Section 138<\/a>, Negotiable Instruments Act, 1881<\/a> (NI Act) against the petitioner, a Single Judge Bench of Anoop Kumar Dhand, J., quashed the impugned order, holding that the petitioner could not be held liable for the affairs of the school after his resignation.<\/p>\n

The Court further held that “No greater damage can be done to the reputation of a person than dragging him in a criminal case.<\/span>”<\/p>\n

Also read: Section 138 of NI Act Explained: Cheque Bounce Notice, Procedure & Landmark Rulings<\/a><\/p>\n

Background<\/p>\n

In the present case, the petitioner was posted as the Principal in a school and while in service, he issued a cheque in favour of the complainant, but he resigned from the said post on 24 March 2017. The said cheque dated 28 April 2017 was given as security, and the same was allegedly misused by the complainant by presenting it before the bank on 10 May 2017 and it was dishonoured with remarks “funds insufficient” on the same day. Eventually, a complaint was filed under Section 138<\/a>, NI Act<\/a>.<\/p>\n

Aggrieved, the petitioner approached the High Court and contended that no cognizance was taken against the director or other officials responsible for the affairs of the school, rather it was taken against him, who had no concern whatsoever with the affairs of the school, after his resignation.<\/p>\n

Also read: Section 138 NI Act Explained: When Does a Cheque Bounce Become a Criminal Offence?<\/a><\/p>\n

Analysis<\/p>\n

The Court noted that the complaint under Section 138<\/a>, NI Act<\/a> was submitted by the complainant against the petitioner as well as against the school and the fact that the petitioner had resigned was admitted in the complaint by him. The Court clarified that “the petitioner was not discharging his duties as the Principal of the said School, at the relevant time and date when the cheque was presented before the Bank by the complainant, which was ultimately dishonoured<\/span>”.<\/p>\n

Further, the Court expressed shock over the fact that no cognizance was taken against the management of the said school or director of the school, rather cognizance was taken only against the petitioner, who had already resigned from the post of Principal of the said school.<\/p>\n

The Court emphasised that criminal prosecution of any person is a serious matter as it affects the liberty of that person, and no greater damage can be done to the reputation of a person than dragging him in a criminal case. The Court stated that in the case at hand, the petitioner had resigned from the post of the Principal and the cheque in question had the signatures of the petitioner, alleged to be issued after the date of his resignation.<\/p>\n

The Court relied on the Supreme Court’s decisions in Adhiraj Singh v. Yograj Singh<\/span>, 2024 SCC OnLine SC 5558<\/a>, and Anita Malhotra v. Apparel Export Promotion Council<\/span>, (2012) 1 SCC 520<\/a>, both holding that a person who has validly resigned before the relevant date cannot be held responsible for the affairs of the company or institution thereafter.<\/p>\n

The Court stated that the “petitioner cannot be held responsible for the affairs of the School after his resignation<\/span>” as his relationship of employee with the employer school came to an end after his resignation.<\/p>\n

Decision<\/p>\n

Thus, the Court opined that the petitioner was neither liable nor responsible for the cheque in question issued, if any, under his signatures, after his resignation from the post of Principal of the school. The Court clarified that the complainant remained at liberty to proceed against the actual persons responsible for the affairs of the School.<\/p>\n

Accordingly, the Court quashed and set aside the impugned order stating that it was not sustainable.<\/p>\n

Also read: Treating Employment Bond Amount as Debt Without Establishing Actual Loss Impermissible under Section 138 NI Act; Employee Acquitted in Cheque Dishonour case: Bengaluru Sessions Court<\/a><\/p>\n

[Mohan Lal Sharma<\/span> v. Ashok Vardhan Singh<\/span>, S.B. Criminal Miscellaneous (Petition) No.7077 of 2021, decided on 14-7-2026<\/span>]<\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Petitioner:<\/span> S.S. Hora, Tara Chand Sharma and Himanshu Agarwal, Advocates<\/p>\n

For the Respondent:<\/span> Sandeep Sharma, Harshit Parashar and Anupam Sharma, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The High Courts observed that criminal prosecution of any person is a serious matter as it affects the liberty of that person.<\/p>\n","protected":false},"author":67540,"featured_media":392180,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,10],"tags":[3029,29922,111315,111316,66973,17041,30606,62134,2509,23584],"class_list":["post-392179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-cheque_bounce","tag-cheque-dishonour","tag-cheque-dishonour-complaint","tag-criminal-prosecution-for-cheque-dishonour","tag-justice-anoop-kumar-dhand","tag-negotiable-instruments-act","tag-ni-act","tag-ni-act-proceedings","tag-Rajasthan_High_Court","tag-section-138-ni-act"],"yoast_head":"\nRaj HC: Former school principal not liable under S. 138 NI Act after resignation | SCC Times<\/title>\n<meta name=\"description\" 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