Criminal liability of non-executive directors requires active participation and intent; mere board membership or passive association is insufficient.

A non-executive director could not be fastened with criminal liability under the Penal Code merely because of board membership, signing balance sheets, or alleged non-interference in the acts of other accused. The Court applied the settled principle that vicarious liability cannot be presumed unless the statute expressly creates it, and held that abetment requires specific material showing mens rea and a positive act of participation. Passive association, negligence, or carelessness was insufficient to establish conspiracy or abetment. In the absence of material showing active involvement and criminal intent, the criminal proceedings against the director were quashed.

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Issues: Whether the criminal proceedings against a non-executive director of a company could be quashed for want of material showing active participation and criminal intent, and whether mere board membership, signing of balance sheets, or non-interference with the acts of other accused could sustain liability for conspiracy or abetment under the Penal Code.

Analysis: The allegations against the petitioner were examined in the light of the settled principle that, for offences under the Penal Code, vicarious liability cannot be presumed unless the statute expressly creates it. The materials showed that the petitioner was a non-executive director and that the only allegation against him was non-interference in the acts of the principal accused. Mere attendance at board meetings or signing balance sheets was held insufficient to infer that he was in charge of the day-to-day affairs of the company or that he had personally participated in the alleged offences. For abetment, the prosecution was required to show mens rea and a positive act; negligence, carelessness, or passive association was not enough. On the materials placed, there was no evidence of an active role coupled with criminal intent.

Conclusion: The proceedings against the petitioner were not sustainable and were quashed insofar as he was concerned.

Ratio Decidendi: In prosecutions under the Penal Code, a company director cannot be fastened with criminal liability merely by reason of office or passive association; there must be specific material showing active participation and criminal intent, and vicarious liability cannot be implied in the absence of a statutory deeming provision.

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