Directors cannot be held vicariously liable for company violations unless specific allegations establish their personal involvement or negligence in the conduct of business.

JUDGEMENT

1. By way of present petition under Article 226 of the Constitution of India read with section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code'), the petitioner has prayed for quashment of the complaint being Criminal Complaint No.325 of 2006, filed on April 17, 2006 by the respondent No.2­original complainant against the petitioner in the Court of the learned Judicial Magistrate, First Class, Mundra, District Kutch.

2. The brief facts leading to filing of the present petition are as under :

2.1 The petitioner was working as Deputy General Manager with ICICI Bank Ltd. as a full time employee. A company, namely, Jindal Saw Ltd., obtained certain credit facilities from the ICICI Bank Ltd. and Facility Agreements were entered into between Jindal Saw Ltd. and the ICICI Bank Ltd. By virtue of these Facility Agreements, the Bank had the power and authority to appoint a Nominee Director on the Board of Directors of Jindal Saw Ltd., pursuant to which ICICI Bank Ltd. appointed the petitioner as its Nominee Director on the Board of Directors of Jindal Saw Ltd. on July 30,

2004.

2.2 It is the case of the petitioner that such nomination was withdrawn by the ICICI Bank Ltd.

on September 16, 2005 and this aspect has been noted by the Registrar of Companies. Even a copy of Form No.32 is also brought on record.

2.3 Jindal Saw Ltd. has one pipe manufacturing plant at Mundra, District Kutch. The said plant was set up by Jindal Saw Ltd. at the express invitation of the Government of Gujarat. The State of Gujarat had promised many incentives, including tax sops and a single window environmental clearance system to Jindal Saw Ltd. It is the say of the petitioner that being a nominee of the ICICI Bank Ltd., the duties of the petitioner were restricted to attending the board meetings and ensuring that no decision to the detriment of the lender bank was taken by the said company. The day­to­day functioning was not to be looked after by the petitioner.

He also has urged that he had no role virtually in running the pipe manufacturing plant.

2.4 A summons issued on April 17, 2006 was received from the Court of the learned Judicial Magistrate, First Class, Mundra, in Criminal Complaint/Case No.325 of 2006, whereby the petitioner was arraigned as an accused No.10. Such complaint was filed for the alleged violation of some of the provisions of the Environment Protection Act, 1986 and Water (Prevention and Control of Pollution) Act, 1974 , whereby Jindal Saw Ltd has been mainly made accused.

2.5 It is the say of the petitioner that there is no specific allegation levelled against the petitioner in the complaint for the alleged act of violation of various statutory provisions by the accused company since the petitioner was no longer a Nominee Director as he ceased to be one on September 16, 2005. He, therefore, has urged that in absence of any specific averment in the complaint making the petitioner remotely responsible vicariously in his role as a Director, the complaint may be quashed qua the petitioner herein.

3. This Court has protected the petitioner vide order dated January 19, 2010 staying the further proceedings of the complaint. The said interim relief has been continued till date.

4. The learned Senior Counsel Mr.P.M. Thakkar appearing with Mr.Ravindra Shah, learned counsel appearing for the petitioner, has strenuously submitted that this complaint deserves to