SC relief for senior officials of cos against vicarious liability | India News

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NEW DELHI: Noting that vicarious liability cannot automatically be attributed to senior management for an offense committed by the company in the absence of statutory provisions, the Supreme Court declared that the president / CEO / director of ‘A company cannot be sued if there is no specific allegation against them.
A bench of Judges MR Shah and AS Bopanna said that in such cases a magistrate should record his satisfaction with a prima facie case against the CEO, the secretary general and the directors of the company and the role played by them in their respective qualities. before initiating criminal proceedings against them. He said they cannot be routinely summoned on a simple statement made against them for the offense committed by their company.
The judiciary upheld the order issued by the Karnataka High Court quashing the subpoena order issued by a magistrate against the director general and other senior officials of a company over a private complaint filed by an individual alleging that they were all in collusion and were involved in the business of the company. actions to damage his property. He alleged that its perimeter wall had been demolished and that trees were cut by the company during the laying of a pipeline.
The Supreme Court noted that there was no specific allegation against any of the officials who were not even present in the city when the alleged trespass and demolition took place.
“As accepted by this court in the India Infoline Limited case, in the subpoena order, the learned magistrate must record his satisfaction with a prima facie case against the accused who are the managing director, the secretary of the company and the directors of the company and the role played by them in their respective capacities which is a sine qua non for bringing criminal proceedings against them. With regard to the assertions and allegations contained in the complaint , there are no specific allegations and / or assertions regarding the role played by them in their capacity as president, general manager, executive director, deputy general manager and planner and executor ”, the bench mentioned .
“By the simple fact that they are president, general manager / general manager and / or deputy general manager and / or planner / supervisor of A1 & A6 (companies), without any specific role being assigned to them and the role played by them in their capacity, they cannot be grouped together as an accused, more particularly, they cannot be held responsible by virtue of others for the offenses committed by A1 and A6 ”, he declared.
The bench has automatically stated that they cannot be vicariously held responsible unless there are specific allegations and claims against them in regards to their individual role.


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