Summary
The Supreme Court quashed a forest department complaint under Section 4 read with Section 19 of the Punjab Land Preservation Act, 1900 against three officers of real estate companies, holding that the Act imposes no vicarious liability on directors or officers, that the complaint attributed no specific act to them, and that criminal vicarious liability arises only where a statute expressly provides for it.
Issues
- Whether the complaint, read as it stands, disclosed an offence under Section 4 read with Section 19 of the Punjab Land Preservation Act, 1900 against the appellants, who were officers of companies developing the land.
- Whether directors or officers of a company can be held vicariously liable for an offence in the absence of a statutory provision and of specific allegations of personal involvement.
Provisions considered
- Section 4, Punjab Land Preservation Act, 1900The Court set out the power to regulate, restrict or prohibit, among other things, the cutting of trees in areas notified under Section 3, and the 2013 Haryana order prohibiting tree cutting in the notified area, and examined whether the complaint attributed any breach of that prohibition to the appellants personally. (¶¶ 4, 9, 10, 16)
- Section 19, Punjab Land Preservation Act, 1900The penal provision punishes any person who, within a notified area, breaches a regulation, restriction, prohibition, order or requisition under Sections 4, 5, 5-A or 7-A. The Court held that the scheme of the Act attaches no vicarious liability to directors or office bearers of a company; only the individual's own act makes him liable. (¶¶ 9, 10, 16, 18)
- Section 482, Code of Criminal Procedure, 1973The High Court refused to quash the complaint. The Supreme Court held that it failed to ask whether the complaint, taken at face value and in its entirety, showed the appellants to be personally liable, and quashed the complaint and the cognizance order. (¶¶ 2, 16, 18, 19)
Held
- Under the scheme of the Punjab Land Preservation Act, 1900 no vicarious liability attaches to directors or office bearers of a company; liability for the offence punishable under Section 19 arises from the individual's own act. (¶ 10)
- A director's liability for wrongs of the company is not automatic. Mere authorisation of an act on the company's behalf or a supervisory role is not enough; a specific act must be attributed showing personal involvement beyond routine corporate duties, and where the company is the offender, vicarious liability cannot be imputed to directors without a statutory provision to that effect. (¶ 11)
- It is a cardinal principle of criminal law that there is no vicarious liability unless the statute specifically provides for it; even where it does, not every director is automatically liable, and there must be specific, substantiated allegations of a particular role. The complainant bears the burden of making such averments, and there is no presumption that every officer knows of the transaction in question. (¶¶ 12, 13, 14, 17)
- The complaint contained no allegation that the appellants were directly responsible for uprooting the trees; the persons actually found felling trees and the company holding the development licence were not arrayed as accused, and the allegations against the appellants personally were vague. (¶¶ 10, 14)
- A court acting on a complaint under Section 156(3) or Section 200 CrPC should remain vigilant and apply its mind carefully before taking cognizance of such a complaint; here process could not have been issued against the appellants. (¶¶ 15, 18)
Result
Appeal allowed; the complaint and the order taking cognizance quashed, with liberty to the authority to proceed against the company for any breach of the conditions of its licence.