Criminal Liability on Officers of Company Arises Only When Offence has been Committed by Company

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Dec 31, 2021

Criminal Liability on Officers of Company Arises Only When Offence has been Committed by Company

The SC, in the matter of Dayle De’souza v. Government of India^[1] reiterated the principle of vicarious liability and held that ‘a company being a juristic person cannot be imprisoned, but it can be subjected to a fine, which in itself is a punishment. Every punishment has adverse consequences, and therefore, prosecution of the company is mandatory. The exception would possibly be when the company itself has ceased to exist or cannot be prosecuted due to a statutory bar’. Accordingly, in the absence of the company being arraigned as an accused, the SC held that a complaint against its officers cannot be maintained.

[1] 2021 SCC OnLine SC 1012.

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