Vicarious liability of company directors cannot be quashed when complaint specifically alleges control over business conduct.

A complaint against a company director for an offence under the Income-tax Act cannot be quashed at the threshold where it specifically alleges that the director was in charge of and responsible for the conduct of the company's business. At the quashing stage, the court must accept the complaint and supporting material at face value to see whether the essential ingredients of vicarious liability are disclosed. The complainant's pre-charge statement supported those averments, and the absence of the remaining directors as accused was irrelevant on the pleaded facts. The challenge to the complaint and proceedings therefore failed.

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Issues: Whether the complaint and proceedings for an offence under section 276CC read with section 278B of the Income-tax Act could be quashed under section 482 of the Code of Criminal Procedure, 1973 on the ground that the petitioner was not shown to be involved in the management of the company and that all directors were not impleaded.

Analysis: The complaint specifically alleged that the accused directors were exercising powers to control the day-to-day business of the company and were in charge of and responsible for its conduct. The complainant's pre-charge statement supported these averments. For invoking vicarious liability under section 278B(1), the court at the quashing stage was required to see whether the complaint and supporting material, taken at face value, disclosed the essential ingredients of the offence. On those allegations, no case for quashing was made out. The fact that the remaining directors were not joined as accused was held to be irrelevant at that stage.

Conclusion: The petition for quashing of the complaint and proceedings was not maintainable on the facts pleaded, and the challenge failed.

Ratio Decidendi: A complaint against a director for an offence by a company cannot be quashed at the threshold where it contains specific averments that the director was in charge of and responsible for the conduct of the company's business, even if all other directors are not impleaded.

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