Limitation and vicarious liability in complaint proceedings: prima facie responsibility and prosecution competence upheld at summoning stage

Limitation for a statutory board's complaint was assessed from the point when the investigation report was completed and approved, because only then did the board become competent to prosecute; on that basis, the cognizance order was not time-barred. At the summoning stage, the complaint's prima facie assertion that the company and its directors were responsible for the conduct of its affairs was sufficient to support vicarious liability, and detailed proof was unnecessary. The court treated the petitioners' authorities as factually distinguishable and upheld the summoning order, rejecting the challenge on both limitation and merits.

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Issues: (i) whether the cognizance order was barred by limitation; (ii) whether the complaint disclosed a sufficient basis to summon the petitioners on the ground of vicarious liability.

Issue (i): whether the cognizance order was barred by limitation.

Analysis: Limitation had to be examined on the basis of the complaint and annexed documents as they stood at the stage of cognizance. Under the statutory scheme, the Board could file a complaint only after investigation had been completed and the report had been approved. The complaint specifically stated that the investigation report was approved on 09.10.2003, and that was the point when the Board became competent to prosecute. The material filed separately could not override the complaint at this stage, and the question whether there was delay earlier was not to be decided on a threshold challenge.

Conclusion: The cognizance order was not barred by limitation and this issue was decided against the petitioners.

Issue (ii): whether the complaint disclosed a sufficient basis to summon the petitioners on the ground of vicarious liability.

Analysis: The complaint stated that the company and its directors were persons in charge of and responsible for the conduct of its affairs. The petitioners were admittedly working directors during the relevant period. At the summoning stage, the court had to see whether the complaint contained a prima facie assertion of responsibility; detailed proof was not required then. The authorities relied upon by the petitioners were held to be factually distinguishable and did not negate the averment of responsibility made in the complaint.

Conclusion: The complaint disclosed a sufficient prima facie basis for summoning the petitioners, and this issue was decided against the petitioners.

Final Conclusion: The revision petition failed on both limitation and merits, and the summoning order was sustained.

Ratio Decidendi: For cognizance of a complaint by a statutory board, limitation is computed from the point when the competent authority becomes entitled to prosecute on completion and approval of the investigation, and a summoning order may be upheld where the complaint prima facie attributes responsibility for the company's conduct to the accused directors.

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