Vicarious criminal liability of directors cannot be presumed absent a pleaded role or statutory basis under the finance law.

Criminal prosecution against company directors was held unsustainable where the FIR alleged violations only against the companies and pleaded no specific act, omission, or statutory basis for fastening vicarious criminal liability on the directors. The Bihar Finance Act provisions invoked did not create such liability by themselves, so mere office as director was insufficient to sustain prosecution. The continuation of proceedings was also weakened by review orders setting aside the penalties imposed on the companies, indicating that no sustainable offence survived against the petitioners. On that basis, the FIR and criminal prosecution were quashed as against the directors as an abuse of process.

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Issues: Whether the FIR and criminal prosecution against the petitioners, who were directors of the companies, were liable to be quashed for want of any pleaded role or statutory basis for vicarious criminal liability under the Bihar Finance Act.

Analysis: The FIR attributed the alleged violations to the companies, while no specific act, omission, or role was assigned to the petitioners as directors. The statutory provisions invoked did not create vicarious liability by themselves, and criminal liability could not be fastened on the petitioners merely by reason of their office. The continuance of the proceeding was further undermined by the setting aside of the penalties imposed on the companies in review, which supported the conclusion that no sustainable offence survived against the petitioners. In such circumstances, allowing the prosecution to continue would amount to abuse of the process of court.

Conclusion: The FIR and the criminal prosecution were quashed so far as the petitioners were concerned, and the writ application was allowed.

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