Case Note & Summary
The applicants, Darpankumar Jitendrabhai Shah and another, filed a criminal revision application under Sections 397 and 401 of the Code of Criminal Procedure, 1973, challenging the order dated 13.10.2017 passed by the Additional Judicial Magistrate First Class, Umargam, rejecting their applications (Exhibits 9 and 10) for discharge in Criminal Case No.698 of 2015. The case arose from FIR No.I-14/2015 registered under Sections 405 and 406 of the Indian Penal Code, 1860, alleging criminal breach of trust against a company. The applicants, who were directors of the company, sought discharge on the ground that there were no specific allegations against them regarding the entrustment of property or their involvement in the alleged breach of trust. The learned Magistrate rejected the discharge applications, holding that the directors could be vicariously liable. The High Court, after hearing the parties, allowed the revision application. The court held that vicarious criminal liability cannot be imposed on directors without specific averments of their role in the offence. The court noted that the complaint did not contain any specific allegations against the applicants regarding entrustment of property or their dominion over the same. Consequently, the court set aside the order of the Magistrate and discharged the applicants from the criminal case.
Headnote
A) Criminal Procedure Code - Discharge - Section 239 CrPC - Vicarious Liability - The court considered whether directors can be discharged when there is no specific allegation of their involvement in the offence of criminal breach of trust. Held that vicarious criminal liability cannot be imposed without specific averments of the role of the directors. (Paras 1-17) B) Indian Penal Code - Criminal Breach of Trust - Sections 405 and 406 IPC - Vicarious Liability - The court examined the applicability of Sections 405 and 406 IPC to directors of a company. Held that in the absence of specific allegations of entrustment or dominion over property, directors cannot be held vicariously liable for the acts of the company. (Paras 5-15)
Issue of Consideration
Whether the applicants, being directors of a company, can be discharged from criminal proceedings under Sections 405 and 406 IPC in the absence of specific allegations of their involvement in the alleged criminal breach of trust.
Final Decision
The High Court allowed the revision application, set aside the order dated 13.10.2017 passed by the Additional Judicial Magistrate First Class, Umargam, and discharged the applicants from Criminal Case No.698/2015.
Law Points
- Vicarious liability in criminal law
- Discharge under Section 239 CrPC
- Scope of revision under Sections 397 and 401 CrPC
- Criminal breach of trust under Sections 405 and 406 IPC
