Specific averments are essential to prosecute company-associated directors; bare designation or relationship cannot sustain vicarious liability.

Criminal proceedings against directors of associated companies were quashed because the complaint and SFIO material did not contain specific averments showing that they were in charge of, or responsible for, the company's day-to-day affairs. The court found no supporting facts of their direct participation in the alleged diversion of funds, falsification of accounts, cheating, forgery, or criminal breach of trust. Mere relationship with the principal accused or holding positions in other companies was held insufficient to sustain vicarious liability or a prima facie case, and the proceedings were treated as an abuse of process.

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Issues: Whether the criminal proceedings against the petitioners, who were arrayed as directors of associate companies, disclosed a prima facie case or were liable to be quashed for want of specific averments showing control over the affairs of the company and for abuse of process.

Analysis: The complaint and the SFIO material were examined to see whether the petitioners were shown to be in charge of and responsible for the day-to-day affairs of the company or had personally participated in the alleged diversion of funds, falsification of accounts, cheating, forgery, and criminal breach of trust. The material did not contain specific facts establishing such control or direct involvement. The allegations, as against the petitioners, were found to be largely based on their relationship with the principal accused and their positions in other companies, without the basic factual foundation required to sustain the prosecution. In the absence of the company itself being arrayed where the complaint sought to fasten vicarious liability through association with company affairs, the proceedings were held to be unsustainable.

Conclusion: The proceedings against the petitioners were held to be an abuse of process and were quashed.

Ratio Decidendi: Criminal prosecution against persons associated with a company cannot be sustained in the absence of specific averments and supporting material showing their direct role or responsibility in the alleged offence; bare relationship or designation, without more, is insufficient to establish a prima facie case.

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