Introduction

The Supreme Court of India, in its determination in
Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd.
& Others, Criminal Appeal Nos. 1047-1048/2021, held
that firm officers equivalent to chairman, managing director,
govt director, and many others. can’t be held vicariously liable below
legal legislation for offences dedicated by the corporate except there are
particular allegations and averments towards them with respect to
their particular person function within the offense dedicated.

Factual Backdrop

The details main as much as the current case are as below:

Mr. Ravindranatha Bajpe (the
“Appellant“) had filed a non-public
grievance earlier than the Judicial Magistrate, First Class, Mangalore
(“Judicial Magistrate“) for offences
punishable below Sections 406, 418, 420, 427, 447, 506 and 120B
learn with Section 34 of the Indian Penal Code, 1860
(“IPC“) towards 13 accused
(Accused Nos 1. and 6 had been firms whereas the Accused Nos. 2 to five
and seven to 13 had been high officers or workers in these firms)
alleging that the Accused No. 1 to 13 had conspired along with
frequent intention to put down pipeline beneath the schedule
properties of the Appellant with none lawful authority and authorized
proper. In furtherance of the identical, the accused had trespassed over
the schedule properties of the Appellant and had demolished the
compound wall and likewise minimize and demolished timber within the schedule
properties. The Judicial Magistrate examined all of the paperwork put
on document and handed an order directing to register case towards
all of the 13 accused, i.e., Accused No. 1 to 13, for offences
punishable below Sections 427 (Mischief inflicting harm), 447
(Criminal trespass), 506 (Criminal intimidation) and 120B (Criminal
conspiracy) learn with Section 34 of IPC. Accused No. 1 to 9
most well-liked legal revision petition earlier than the discovered Sessions
Court which allowed the identical and quashed and put aside the order
handed by the Judicial Magistrate with respect to Accused No. 1 to
8 however confirmed the order handed with respect to the Accused No.
9.

The Appellant filed revision purposes earlier than the Karnataka
High Court (“High Court“), which had been
dismissed by the High Court. The Appellant most well-liked submitting
legal appeals towards the impugned judgment handed by the High
Court earlier than the Supreme Court of India (“Supreme
Court“).

Judgement

The discovered judges of the Supreme Court after listening to the
counsels for the respective events and after going by the
allegations within the grievance of the Appellant seen that besides
for the assertion that Accused Nos. 2 to five and seven & 8 have
conspired with the frequent intention to put the pipeline, with out
any lawful authority and proper, inside the schedule properties
belonging to the Appellant, there have been no particular allegations or
function attributed to the accused within the current case. There had been no
additional allegations on behalf of the Appellant that on the command
of the Accused Nos. 2 to five and seven & 8, the demolition of the
compound wall of the schedule properties had taken place. The
judges of the Supreme Court additional noticed that all the
accused in current case had been merely arrayed as an accused as
Chairman, Managing Director, Deputy General Manager (Civil &
Env.), Planner & Executor, Chairman and Executive Director
respectively and all of them had been stationed at Hyderabad, Telangana
on the time of the fee of the alleged offence.

The Supreme Court whereas deciding the case, positioned reliance on
the next observations made by the Court in its personal earlier
judgments:

I. Sunil Bharti Mittal v. Central Bureau of Investigation,
(2015) 4 SCC 609

The Supreme Court had, within the mentioned case, noticed that:

1. An particular person who has perpetrated the fee of an offence
   on behalf of an organization could be made an accused, together with the
   firm, if there’s ample proof of his energetic function coupled
   with legal intent;




2. When the corporate is the offender, vicarious legal responsibility of the
   administrators can’t be imputed mechanically, within the absence of any
   statutory provision to this impact.

II. Pepsi Foods Limited v. Special Judicial Magistrate,
(1998) 5 SCC 749

The Supreme Court took into consideration its judgement within the
case of Pepsi Foods Limited v. Special Judicial Magistrate,
(1998) 5 SCC 749 the place it was held that summoning of an
accused in a legal case is a critical matter and legal legislation
can’t be set into movement as a matter in fact.

III. Pepsi Foods Limited v. Special Judicial Magistrate,
(1998) 5 SCC 749

The Supreme Court additional took into consideration its judgment
within the case of GHCL Employees Stock Option Trust v. India
Infoline Limited, (2013) 4 SCC 505 that within the order issuing
summons, the Magistrate has to document his satisfaction a couple of
prima facie case towards the accused who’re managing director, the
firm secretary and the administrators of the corporate and the function
performed by them of their respective capacities which is sine qua
non for initiating legal proceedings towards them.

IV. Key statement

The key statement of the Supreme Court was that merely as a result of
the Accused Nos. 2 to five and seven & 8 are the Chairman/ Managing
Director/Executive Director/Deputy General Manager/Planner &
Executor, they can’t mechanically be held vicariously liable,
except, there are particular allegations and averments towards them
with respect to their particular person function within the alleged offence.
Further, the Supreme Court additionally noticed that legal proceedings
can’t be set in movement by itself and {that a} Justice of the Peace granting
summons should document his satisfaction a couple of prima facie case
towards the accused Accordingly, the Supreme Court held that the
High Court had rightly dismissed the revision purposes filed by
the Appellant and had rightly confirmed the order handed by the
Sessions Court quashing and setting apart the order handed by the
Judicial Magistrate issuing course of towards Accused Nos. 1 to eight for
the offences punishable below Sections 427, 447, 506 and 120B learn
with Section 34 of the IPC.

The Supreme Court, foundation the explanations said above, dismissed the
appeals filed by the Appellant and directed the Judicial Magistrate
to proceed with the grievance solely towards the unique Accused
Nos. 9 to 13 by itself deserves, in accordance with legislation.

Implications

It is a progressive judgment because it settles the legislation in India that
workers can’t be held criminally responsible for offenses dedicated
by the corporate, except particular function is attributed to such
workers for the offense.

However, this judgement doesn’t have an effect on legal responsibility of workers
qualifying as ‘officer who’s in default‘ below
the Companies Act, 2013 in addition to vicarious legal responsibility of administrators
below different Indian legal guidelines equivalent to labour legislation, taxation legal guidelines, international
trade management rules, environmental legal guidelines, and many others.

The content material of this text is meant to supply a basic
information to the subject material. Specialist recommendation ought to be sought
about your particular circumstances.

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