ORDER :

Leave granted.

The short question that falls for consideration in this appeal that arises out of an order passed by the High Court of Guwahati is whether the petitioners could be prosecuted on the assumed principle of vicarious liability of top management of a company for the offence of forgery committed by those working at the lower echelons. The legal position on the subject is, in our opinion, fairly well settled by the decisions of this Court that have authoritatively declared that except in situations where the Statute itself creates a vicarious liability and makes prosecution on that basis legally permissible, the law does not generally provide for such prosecution. This Court in Maksud Saiyed v. State of Gujarat and Ors., (2008)5 SCC 668 first examined the question of vicarious liability in criminal cases and summed up the legal position in the following words :

"Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if give face value and taken to be correct in its entirely, would lead to the conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability."

(emphasis supplied)

2. The ratio in Maksud Saiyed's case (supra) was then followed by this Court in S.K. Alagh v. State of U.P. and Ors. (2008)5 SCC 662, wherein too the question was whether the Managing Direction of a Company or its General Manager could be prosecuted for criminal breach of trust simply because they were in those positions without there being any specific allegation of any individual act of omission or commission on their part. In paras 16, 19 and 20 of the decision this Court reiterated the legal position and said :

"16. The Penal Code, save and except some provisions specifically providing therefore, does not contemplate any vicarious liability on the part of a party who is not charged directly for commission of an offence.

17 to 18 xxx xxx xxx

19. As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself.

20. We may, in this regard, notice that the provisions of the Essential Commodities Act, the Negotiable Instruments Act, the Employees Provident Funds and Miscellaneous Provisions Act, 1952 etc. have been created such specifically creates an offence of criminal breach of trust in respect of the amount deducted from the employees by the company. In terms of the explanations appended to Section 405 of the Penal Code, a legal fiction has been created to the effect that the employer shall be deemed to have committed an offence of criminal breach of trust. Whereas a person in charge of the affairs of the company and in control thereof has been made vicariously liable for the offence committed by the company along with the company but even in a case falling under Section 406 of the Penal