Vicarious liability for company offences requires the company to be arraigned first before directors can be convicted.

Vicarious criminal liability under Section 32 of the Industrial Disputes Act could not be imposed on directors or officers unless the company itself was arraigned as an accused and given an opportunity to defend. The court treated the company's prosecution as essential where liability for non-compliance with an award was founded on the company's own commission of the offence, since a finding of guilt behind its back would offend fair trial, natural justice, and Articles 14 and 21 of the Constitution. On that basis, the prosecution and conviction of the officers were held unsustainable, and the conviction and enhanced sentence were set aside.

---

---

Issues: Whether a company had to be arrayed as an accused before its directors or officers could be prosecuted and convicted under Section 32 of the Industrial Disputes Act for non-compliance with an award.

Analysis: The criminal liability under Section 32 is vicarious and arises only when the company, being the person committing the offence, is itself prosecuted and given an opportunity of defence. A finding of guilt against a company cannot be recorded behind its back, because that would offend the principles of fair trial and natural justice and would be arbitrary in the light of Articles 14 and 21 of the Constitution of India. The earlier view that prosecution of directors alone was maintainable could not survive after the authoritative exposition that arraigning the company as an accused is imperative where the statute fastens liability on persons in charge of the company's affairs on the basis of the company's own commission of the offence.

Conclusion: The prosecution and conviction of the petitioners could not be sustained because the company was not arrayed as an accused; the conviction and enhanced sentence were set aside and the accused were acquitted.

Final Conclusion: The proceedings failed for want of impleadment of the company, and the revisional challenge succeeded, resulting in acquittal of the accused and refund of the fine amount, while the connected original petition stood dismissed.

Ratio Decidendi: Where a penal provision imposes vicarious liability on officers for an offence committed by a company, the company must first be arraigned and afforded an opportunity to defend; absent that, conviction of the officers cannot stand.

---