Friday, December 9, 2022

Concept of ‘vicarious liability’ is unknown to criminal law, says Kerala HC

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Kerala High Court has held that there is no hard and fast rule that for being the Managing Director of the Company, a person will have to bear criminal liability, for offences committed by the Company. It was observed that if the complaint bears no specific role played by the accused in commission of the offences then no criminal liability can be fastened against him. The concept of vicarious liability is not recognised in criminal law.

Acting upon a plea filed under section 482 of CrPC for quashing of complaint, a single judge bench of Justice Mary Joseph said it may be that being the Managing Director, the petitioner will have to be engaged in the day to day affairs of the Company he represents, and being a responsible officer will be vicariously liable for the offences, if any, committed by the company. But, for that reason alone, he as the Managing Director, cannot be made criminally liable. For fastening criminal liability on the petitioner in his capacity as the Managing Director of the Company, allegations must be incorporated in the complaint referring to the specific instances of his involvement in that capacity and the mode of involvement.

The petitioner herein was accused of offences committed under sections 120B, 403, 409 and 420 and 34 IPC by the complainant in lieu of private complaint filed before JMFC, Kottayam. The allegation against the representatives of the Company is that they made the complainant believe that quality investment solutions and profits will be offered by the Company within a short span of time and then persuaded the complainant to invest money with the Company and to start depository and trading account with the Company. The petitioner pleaded that only a general allegation is made in the complaint which is not sufficient to fasten criminal liability individually upon him.

Mary Joseph placing reliance on decision of Supreme Court in GHCL Employees Stock Option Trust vs. India Infoline Limited, (2013) 4 SCC 505 wherein it was held that the concept of ‘vicarious liability’ is unknown to criminal law and that if is no specific allegation made against the members of the Board and senior executives of the Company then the complaint u/s 420, 34 IPC is not maintainable. Thus the petition under Section 482 was allowed and the complaint before JMFC, Kottayam stood quashed.


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