2001 (1) TMI 996

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....0 are the signatories of accused No.1 except the bald allegation that the petitioners are directors, no overact has been attributed to them in the complaint. The complaint without even ascertaining the fact the petitioners 3 and 6 are dead and petitioners 4,5 and 7 have retired from the company two years ago, has filed the complaint. Petitioners 4,5 and 7 are only employees of the first accused company and they left the services of the company in 1997 itself, but they have been wrongly described as Directors of the company. 3. The learned counsel for the petitioners strenuously contended except the vague allegation in the complaint that the petitions are also responsible for the conduct of the business of the company and they are also liab....

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....down as follows: "10. Three categories of persons can be discerned from the said provision who are brought within the purview of the penal liability through the legal fiction envisaged in section. They are: (1) The company which committed the offence, (2) Everyone who was in charge of and responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company with whose connivance of due to whose neglect the company has committed the offence." 5. I find it difficult to agree with the learned counsel for the respondent/complainant that necessary and sufficient allegations have been made in the complaint that the petitioners are also responsible for the conduct of ....

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....y, but does not allege that they were in charge of the company. A quick look at the law laid down by the Apex Court will be useful in this context. In Delhi Municipality v. Ram Kishan, the pronouncement reads as hereunder: "so far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complaint, that there is any Act committed by the directors from which a reasonable inference can be drawn that they could also be victoriously liable. In these circumstances, therefore, it can be said that no case against the Directors has been made out ex facie in the allegation made in the complaint and the proceedings against them were rightly quashed by the H....

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....omplaint is vague and does not implicate respondents 1 to 11. Thus it is apparent that mere extraction of the section in the complaint would not suffice, and further vague allegations or assumptions, would not lead any where. The complaint must prima facie disclose, that there was any act committed by the Directors, from which a reasonable inference can be drawn of there vicarious liability, looked at from any angle, on [he averments available in the complaint, the pending prosecution cannot be maintained, in so far as it concerns petitioners 2 to 6 and 8 to 14. It maybe, that the petitioners 1 and 7 may have to be represented by some person in charge of the respective companies. On that score it would not be fair to sustain the prosecuti....