Directors' criminal liability requires specific averments showing default, participation, or conspiracy before prosecution can proceed.

Criminal liability of directors or connected officers cannot be presumed from designation alone. Under the Companies Act, complaints must contain specific averments showing that the accused were officers in default or otherwise responsible for the company's alleged non-compliance; absent such pleadings, the proceedings were held unsustainable. Under the Indian Penal Code, a prima facie offence was not disclosed where the certificate did not attribute signing, fabrication, false certification, common intention, conspiracy, or abetment to the petitioners. The proceedings and process against them were therefore quashed on the pleadings and materials before the Court.

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Issues: (i) Whether the complaints under the Companies Act could proceed against the petitioners who were not shown, on the pleadings, to be the officers in default or otherwise responsible for the alleged default of the company. (ii) Whether the complaints under the Indian Penal Code disclosed any prima facie offence against the petitioners in the absence of specific allegations of participation, common intention, conspiracy or abetment.

Issue (i): Whether the complaints under the Companies Act could proceed against the petitioners who were not shown, on the pleadings, to be the officers in default or otherwise responsible for the alleged default of the company.

Analysis: Liability under the Companies Act was examined with reference to the scheme of Section 73 and the definition of persons liable in default under Section 5. The petitioners were only directors or connected persons of the companies, and the complaints did not contain specific averments showing that they were managing directors, whole-time directors, managers, secretaries, or persons whose directions the board was bound to follow. Mere designation as director was held insufficient to fasten criminal responsibility. The allegations therefore did not satisfy the statutory basis for holding them answerable for the alleged non-compliance.

Conclusion: The complaints under the Companies Act were not maintainable against the petitioners and were liable to be quashed.

Issue (ii): Whether the complaints under the Indian Penal Code disclosed any prima facie offence against the petitioners in the absence of specific allegations of participation, common intention, conspiracy or abetment.

Analysis: The alleged offences under the Penal Code were founded on the same certificate and surrounding facts, but the signatory to the certificate was not among the petitioners. The certificate itself did not establish that the petitioners issued or signed any false certificate within the meaning of Section 197, nor did it show any forgery or fabrication attributable to them. In the absence of clear pleadings showing shared common intention, common object, conspiracy or abetment, constructive criminal liability could not be inferred merely from their position as directors or connected officers.

Conclusion: No prima facie offence under the Indian Penal Code was made out against the petitioners.

Final Conclusion: The criminal complaints and the process issued against the petitioners could not be sustained on the pleadings and materials before the Court, and the proceedings were quashed.

Ratio Decidendi: Criminal liability of directors or connected officers cannot be presumed without specific averments and material showing that they fall within the statutory category of persons in default or that they personally participated through common intention, conspiracy or abetment.

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