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RAMESH TEKWANI (TRADING BUSINESS)     28 September 2013

Director liability

when any civil/criminal offence is committed by a pvt. ltd. company, are all directors of the company liable for this offence???

There was SC ruling in the past Supreme Court orders which had said that “criminal liability can be fastened only on those who, at the time of commission of the offence, were in charge of and were responsible for the conduct of business of the company”. 

Example: if there are 3 directors with one director designated as MD, will he alone be responsible for the offence??? Pls recall the case of a hospital in Kolkata where all directors were arrested after fir broke out and many were killed in the accident...

Can anyone pls quote this SC case and relevant date for study of this important order of SC..???




Learning

 2 Replies

Amritesh Mishra (Advocate)     28 September 2013

Wherever the companies Act imposes penalty for ant act or omission on officer on default, the directors shall be liable to be punished unless they show offense was committed without his knowledge and he has acted in good faith.

RAMESH TEKWANI (TRADING BUSINESS)     30 September 2013

thanks Mr Mishra for your kind reply, but my question was for any criminal act (not under Companies Act). There was SC ruling regarding this aspect, pls inform if you have any info on this SC order or any ref of this order...thanks


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