MALWA COTTON & SPINNING MILLS LTD. vs VIRSA SINGH SIDHU & ORS.

The Supreme Court held that the Punjab and Haryana High Court erred in quashing proceedings under Section 138 of the Negotiable Instruments Act, 1881, against respondent No.1, who claimed to have resigned before the cheques were issued. The Court emphasized that factual disputes regarding the resignation and the responsibilities of the Directors should be resolved at trial, not through a Section 482 application. The Court reinstated the proceedings, asserting that specific allegations against the Directors were present in the complaint, thus reversing the High Court's decision.