Vicarious liability of alternate director was not made out where no specific role, control, or knowledge was pleaded.

Process against an alternate director was quashed where the complaint failed to attribute any specific role, control, or knowledge to him in the alleged loan disbursement without prior sanction under section 295(4) of the Companies Act, 1956. The complaint mainly alleged wrongdoing by the managing director and other directors directly involved, while the petitioner was shown only as an alternate director and practising advocate. His non-signatory status on the cheque and the absence of material showing active participation in the company's day-to-day affairs meant that a balance-sheet signature alone was insufficient to infer knowledge or impose vicarious liability. The limitation point was left open as a mixed question of law and fact.

---

---

Issues: Whether process issued against an alternate director was sustainable under section 295(4) of the Companies Act, 1956 when the complaint did not attribute any specific role, control, or knowledge to him in relation to the alleged loan disbursement without prior sanction.

Analysis: The complaint contained specific allegations mainly against the managing director and other directors who were directly involved in the disbursement of loans to the sister concerns. The petitioner was only shown as an alternate director and practising advocate, and he was not the signatory to the cheque nor was any material placed to show his active participation in the day-to-day affairs of the company. His signature on the balance sheet, by itself, was held insufficient to infer knowledge of the alleged contravention or to fasten vicarious liability. The question of limitation was left open as a mixed question of law and fact and did not govern the final decision on process.

Conclusion: No prima facie case was made out to issue process against the petitioner under section 295(4) of the Companies Act, 1956, and the process and summons were quashed.

---