2025 Supreme(SC) 37

SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
Sanjay Dutt & Ors. – Appellants
VERSUS
The State Of Haryana & Anr. – Respondents
Criminal Appeal No. 11 of 2025 (@ SLP (Crl) No. 7464 of 2024)
Decided On : 02-01-2025

IMPORTANT POINTS
(1) Vicarious liability – While a company may be held liable for wrongful acts of its employees, liability of its directors is not automatic – It depends on specific circumstances.
(2) When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegations to constitute various liability.

Headnote:

(A) Indian Penal Code, 1860 – Section 34 [Bharatiya Nyaya Sanhita, 2023 – Section 3(5)] – Vicarious liability – While a company may be held liable for wrongful acts of its employees, liability of its directors is not automatic – It depends on specific circumstances, particularly interplay between Director’s personal actions and company’s responsibilities – A Director may be vicariously liable only if company itself is liable in first place and if such director personally acted in a manner that directly connects their conduct to company’s liability – Mere authorization of an act at behest of company or exercise of a supervisory role over certain actions or activities of company is not enough to render a director vicariously liable – There must exist something to show that such actions of Director stemmed from their personal involvement and arose from actions or conduct falling outside scope of its routine corporate duties – Where company is offender, vicarious liability of Directors cannot be imputed automatically, in absence of any statutory provision to this effect – There has to be a specific act attributed to Director. (Para 11)

(B) Indian Penal Code, 1860 – Section 34 [Bharatiya Nyaya Sanhita, 2023 – Section 3(5)] – Vicarious liability – It is cardinal principle of criminal jurisprudence that there is no vicarious liability unless Statute specifically provides so – An individual who has perpetrated commission of an offence on behalf of a company can be made accused, if Statute provides for such liability and if there is sufficient evidence of his active role coupled with criminal intent – Primary responsibility is on complainant to make specific averments as are required under law in complaint so as to make accused vicariously liable – For fastening criminal liability on officer of company, there is no presumption that every officer of company knows about transaction in question – Even where such provision for fastening vicarious liability exists, it does not mean that any and all Directors of company would be automatically liable for any contravention of such statute – Vicarious Liability would arise only if there are specific and substantiated allegations attributing a particular role or conduct to such Director, sufficient enough to attract provisions constituting vicarious liability and by extension offence itself. (Paras 12 and 13)

(C) Punjab Land Preservation Act, 1900 – Section 4 read with Section 19 – Criminal Procedure Code, 1973 – Section 482 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 528] – Uprooting of trees – There is no vicarious liability that can be attached to any of directors or any office bearers of company – It is individual liability or act that would make person concerned liable for being prosecuted for offence punishable under Section 19 of Act, 1900 – There are no allegations worth name in complaint that appellants are directly responsible for uprooting of trees with aid of Bulldozers or JCB machines or causing damage to environment – Persons who were actually found at site felling trees have not been arrayed as accused in complaint – Allegations which find place against appellants in their personal capacity seem to be absolutely vague – When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegations to constitute various liability – When jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of Cr.P.C., Court concerned should remain vigilant and apply its mind carefully before taking cognizance of a complaint of present nature – Impugned complaint and order taking cognizance hereby quashed. (Paras 10, 14, 15 and 19)

Facts of the case:

Present appeal arises from the judgment and order passed by High Court of Punjab and Haryana at Chandigarh by which High Court rejected the petition filed by the appellants herein invoking Section 482 of Code of Criminal Procedure for the purpose of quashing of complaint no. 41 of 2022 lodged by the Range Forest Officer for the alleged offence under Section 4 of the Punjab Land Preservation Act, 1900 punishable under Section 19 of the Act, 1900.

Findings of Court:

If it is the case of the department that the company has committed any breach or violation of any of the conditions imposed at the time of grant of license, then it is always open for authority concerned to proceed against the company for violation of such terms and conditions.

Result : Appeal allowed.