Vicarious liability in company offences cannot be quashed at the threshold when the accused's control is disputed and needs trial.

Inherent jurisdiction under Section 482 CrPC should not be used to quash a criminal complaint where the accused's role in the company, and any resulting vicarious liability, turns on disputed facts. If the complaint and accompanying material prima facie indicate that a person may have been in charge of, or responsible for, the company's business, the question must be decided at trial. A person need not be a director to face liability if the material suggests control, including directions to the board or involvement in day-to-day affairs. Where the alleged SEBI contravention is continuing, liability cannot be excluded at the threshold.

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Issues: Whether the criminal complaint could be quashed under the inherent jurisdiction on the ground that the petitioner was neither a director nor a person in charge of and responsible for the company's business, so as to exclude vicarious liability for the alleged offences.

Analysis: The complaint alleged that the petitioner was among the persons in charge of the company's day-to-day affairs. The petitioner relied on incorporation documents to contend that he was only an initial subscriber and not a director, while the respondent produced letters from the company describing him as a promoter and director. In proceedings under Section 482 of the Code of Criminal Procedure, 1973, the Court does not weigh competing evidence or resolve disputed questions of fact. Where the materials disclose a factual controversy as to whether the accused was a promoter, director, or otherwise in control of the company, the issue of vicarious liability must be determined at trial. A person need not necessarily be a director to be liable if he was in charge of and responsible for the conduct of the business, including where the board acted on his directions or instructions. The continuing nature of the alleged SEBI contravention also meant that liability could not be ruled out at the threshold.

Conclusion: The complaint was not liable to be quashed and the petitioner's challenge failed.

Ratio Decidendi: Inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 should not be used to quash a complaint where the accused's role in the company and resultant vicarious liability depend on disputed facts that require trial, especially when the allegations and accompanying material prima facie show possible control or responsibility for the company's business.

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