Director liability in criminal complaints requires a specific averment of being in charge of company business; mere office is insufficient.

A director cannot be subjected to criminal prosecution on the basis of designation alone unless the complaint specifically pleads that, at the relevant time, he was in charge of and responsible for the conduct of the company's business. The Gujarat HC found no such foundational averment, nor any overt act or factual basis to support vicarious liability, so mere office as director was insufficient to sustain the complaints. The Court treated the absence of this essential pleading as rendering the proceedings unsustainable against that accused and exercised inherent powers to prevent abuse of process, while leaving the case against the remaining accused to continue.

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Issues: Whether criminal complaints against a director could be sustained when the complaints did not contain an averment that he was in charge of, and responsible for, the conduct of the company's business at the relevant time.

Analysis: The complaints were examined to see whether they contained the foundational averment necessary to fasten criminal liability on a director. The record showed no specific statement that the applicant was in charge of or responsible for the conduct of the company's business, nor any overt act or factual basis from which such vicarious liability could be inferred. Mere designation as a director was held insufficient to attract criminal liability. In that situation, the Court found that the matter fell within the scope of inherent powers to prevent abuse of process.

Conclusion: The absence of the essential averment rendered the complaints unsustainable against the applicant, and the proceedings were quashed qua him.

Final Conclusion: The applicant was relieved from criminal proceedings, while the case against the remaining accused was left to continue in accordance with law.

Ratio Decidendi: A director cannot be subjected to criminal prosecution on the basis of office alone unless the complaint specifically pleads that, at the relevant time, he was in charge of and responsible for the conduct of the company's business.

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