Chairman, Directors And Officers Can't Be Summoned In Criminal Complaint Against Company Without Specific Allegations About Their Individual Role

KEY TAKEAWAYS

• The Supreme Court has reiterated that a company's Chairman, Managing Director/Executive Director, and others cannot be summoned in a criminal case if specific allegations about their specific role are not made in the complaint, as they cannot be held vicariously liable for the company's criminal acts.
• "Merely because they are Chairman, Managing Director/Executive Director and/or Deputy General Manager and/or Planner/Supervisor of A1 & A6, without any specific role attributed and the role played by them in their capacity, they cannot be arrayed as an accused, more particularly they cannot be held vicariously liable for the offences committed by A1 & A6", the Supreme Court observed in the case Ravindranatha Bajpe VS Mangalore Special Economic Zone Ltd and others.
• The case was observed by Justices MR Shah and AS Bopanna.

BACKGROUND

• A private complaint was filed against Mangalore Special Economic Zone Ltd and its contractor company, stating that they had trespassed into the complainant's land and wrecked his compound wall while laying a pipeline.
• The complaint had also named the company's directors and other officers, alleging violations of the Indian Penal Code's Sections 406, 418, 420, 427, 447, 506 and 120B, as well as Section 34.
• The accused were served with a summon by the Magistrate.
• Later, the Sessions Court made this order, which was affirmed by the High Court, which dismissed the complainant's revision petition.
• The complainant argued in his appeal that what is required to be reviewed at the stage of summoning the accused is whether a prima facie case is made out on the basis of the complainant's oath and the information supplied at this point, and that a full examination on the merits is not required.
• On behalf of the accused, it was argued that issuing summons/process by the Court is a very serious matter, and that the Magistrate should not have issued the process unless there were specific allegations and the role attributed to each accused was more than a bare assertion.

COURT’S OBSERVATION

• The court noted that except for the bald statement that the accused conspired with a common intention to lay the pipeline within the schedule properties belonging to the complainant, without any lawful authority or right whatsoever.
• And in furtherance they committed trespass into the complainant's schedule properties and demolished the compound wall, the court noted that there are no other allegations that the complainant has made.

Do you think the directors, chairman etc, of a company should be summoned in a criminal complaint even though they do not have any individual allegations in the specific situation? Let us know in the comments below!