Specific averments required to sustain vicarious liability against a director under the SEBI Act; general allegations are insufficient.

Vicarious liability under the SEBI Act cannot be invoked against a director unless the complaint contains specific averments showing that the person was in charge of, and responsible for, the conduct of the company's business. General statements that directors collectively managed affairs are insufficient, and criminal process cannot issue merely because a person holds the title of director. As the complaint did not disclose the petitioner's individual role, participation, consent, connivance, or neglect, and the record suggested she was only a subscriber, the complaint and summoning order were unsustainable against her and liable to be quashed.

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Issues: Whether the complaint and summoning order could be sustained against the petitioner in the absence of specific averments showing that she was in charge of, and responsible for, the conduct of the company's business so as to attract vicarious liability under the SEBI Act.

Analysis: The complaint contained only general assertions that the directors were collectively responsible for the company's affairs and business. The allegations did not spell out the petitioner's individual role, the nature of her participation, or any specific act, consent, connivance, or neglect attributable to her. In proceedings of this nature, criminal process cannot be issued merely because a person is described as a director; the complaint must disclose the factual foundation necessary to bring that person within the statutory basis of vicarious liability. The material on record also indicated that the petitioner was shown as a subscriber, while the complaint did not furnish a prima facie basis for treating her as a director responsible for day-to-day conduct of business.

Conclusion: The complaint and the summoning order were unsustainable against the petitioner and were liable to be quashed.

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