Bombay High Court Quashes Complaint Against ICICI Bank Officials in Octroi Evasion Case

Overview of the Case

In a significant ruling on corporate liability, the Bombay High Court has quashed the criminal complaint and summons against senior officials of ICICI Bank Limited in a case involving alleged evasion of octroi duty on gold imports. The decision, delivered by Justice Dr. Neela Gokhale on December 8, 2025, in Criminal Writ Petition No. 487 of 2010, emphasizes the need for specific averments when invoking vicarious liability against company directors and officers. The petitioners included ICICI Bank, its then CEO and MD Chanda Kochhar, former Deputy MD Dr. Nachiket Mor, legal department member Vasudeo Kulkarni, and branch manager Asavari Patankar. The respondents were the State of Maharashtra and the Pune Municipal Corporation (PMC).

The case stemmed from a complaint filed by PMC in 2009 (Criminal Case No. 236 of 2009) before the Judicial Magistrate First Class (PMC), Pune, under Sections 398 and 401 of the Bombay Provincial Municipal Corporations Act, 1949 (BPMC Act). PMC alleged that the bank imported gold bullions and coins into Pune's limits between April 1, 2006, and August 31, 2009, without paying octroi duty, amounting to over Rs. 1.27 crore, plus penalties. Despite notices issued in September and October 2009, the bank was accused of continuing imports, leading to summons issued on November 20, 2009.

Key Arguments from Both Sides

The petitioners, represented by advocate Faisal Ali Sayyed, argued that the complaint lacked any specific allegations against the individual officers (Petitioners 2 to 5). They contended that the averments were generic and indefinite, failing to establish the ingredients of the offense under Section 398, which requires intent to defraud. Without attributing a specific role or knowledge to the officials, vicarious liability under Section 401 could not apply, rendering the summons based on mere surmises.

PMC's counsel, Abhijit P. Kulkarni, countered that the offense under Section 398 is complete upon importing goods without paying octroi, regardless of intent beyond the act itself. Relying on the precedent in P. D. Kashikar v. State of Maharashtra (1993 Mh.L.J. 652), he argued that the duty falls on the importer to declare and pay octroi upon entry into municipal limits. For companies, Section 401 deems directors and managers liable unless they prove lack of knowledge or consent, making the complaint maintainable.

Legal Precedents and Principles Applied

The court drew parallels between the BPMC Act's vicarious liability provisions and those under the Negotiable Instruments Act, 1881 (Sections 138 and 141). It extensively cited Supreme Court judgments to underscore that mere designation as a director or officer is insufficient for liability. In National Small Industries Corporation Ltd. v. Harmeet Singh Paintal & Anr. (2010) 3 SCC 330, the apex court held that specific averments are required to fasten criminal liability, with no presumption that every director knows of transactions. Principles include:

• Primary responsibility on the complainant to aver the accused's role in the company's conduct.
• Liability only for those in charge at the time of the offense.
• No deemed liability without pleaded and proved facts.

Further, in N.K. Wahi v. Shekhar Singh & Ors. (2007) 9 SCC 481 and S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89, the Supreme Court stressed clear allegations of the director's involvement, rejecting prosecutions based on vague complaints. The recent Kamalkishor Shrigopal Taparia v. India Ener-Gen Pvt. Ltd. (2025) 7 SCC 393 reinforced that liability depends on active involvement, not just position.

Under Section 398 BPMC Act, the court clarified that offenses require (i) import of liable goods, (ii) non-payment of octroi, and (iii) intent to defraud. Section 401 extends liability to company officers but only with specific incriminating roles ascribed.

Pivotal Excerpts from the Judgment

The judgment highlighted the complaint's deficiencies: "A plain reading of the complaint does not demonstrate any role specifically attributed to any of the Petitioner Nos.2 to 5... Although the statutory regime of the BPMC Act attracts the doctrine of vicarious liability, prosecution against the Petitioner Nos.2 to 5 cannot continue in the absence of any averment ascribing a specific role attributed to them."

It further noted: "It is settled law that when a company is the accused, its directors, managers, secretary, etc, can be roped in only if there is some incriminating role ascribed to them."

Court's Decision and Implications

The Bombay High Court partially allowed the petition, quashing the complaint and summons against Petitioners 2 to 5 (the officials) due to the absence of specific averments. The proceedings against ICICI Bank (Petitioner 1) continue before the JMFC (PMC), Pune, with all other contentions left open.

This ruling reinforces safeguards against overbroad prosecutions of corporate personnel, requiring complainants to plead and prove individual culpability. It serves as a caution for municipal corporations and regulators to draft complaints meticulously, potentially reducing frivolous summons on executives. For businesses operating in municipal limits, it underscores the importance of clear internal compliance to mitigate vicarious liability risks in statutory offenses like octroi evasion.

The petition was reserved on November 27, 2025, and pronounced on December 8, 2025, following interim orders in 2010 and 2011 that stayed personal appearances.