Understanding Vicarious Liability in Criminal Proceedings: A Case Analysis


Mr. Kaningat Rajan vs M/S. Ample Technologies Private

18 May, 2023

Bench: Hon’ble  K.Natarajan



In a recent case filed under Section 482 of the Criminal Procedure Code (Cr.P.C.)( preserves the inherent powers of the High Court to prevent an abuse of the process of any court or to secure the ends of justice), the Supreme Court examined the issue of vicarious liability in criminal proceedings. The petition sought to quash the criminal proceedings against the petitioner, who was the third accused in a case involving the dishonor of a cheque. This blog post provides a summary and analysis of the court’s decision and its implications for cases involving vicarious liability.

Case Summary:

The petitioner, accused No. 3, filed a petition to quash the criminal proceedings pending against him in the XXVIII Additional Chief Metropolitan Magistrate Court in Bengaluru. The complainant had filed a private complaint under Section 138 of the Negotiable Instrument Act (Dishonour of cheque for insufficiency, etc., of funds in the account.), alleging that a cheque issued by the company (accused No. 1) was dishonored. Accused No. 2 and accused No. 3 (the petitioner) were the directors of the company. The trial court had taken cognizance of the case against all three accused and issued summons.

The petitioner argued that he was not responsible for the day-to-day affairs of the company and that there was no specific averment in the complaint establishing his liability. The petitioner relied on a Supreme Court judgment (S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla and Another) to support his contention.

The respondent countered by asserting that both accused No. 2 and accused No. 3, being directors of the company, were responsible for the conduct of its business. The complainant’s allegations in the complaint stated that accused No. 2 and accused No. 3 were in charge of the day-to-day affairs of the company.


Court’s Decision and Analysis:

After hearing the arguments from both sides and examining relevant precedents, the Supreme Court rendered its decision. The court referred to the S.M.S. Pharmaceuticals case and highlighted the necessity of specific averments in the complaint to establish the accused’s responsibility for the conduct of the company’s business. The court emphasized that merely being a director does not automatically make a person liable under Section 141 of the Negotiable Instrument Act.

The court also cited the S.P. Mani and Mohan Dairy case, which clarified the complainant’s responsibility to make specific averments in the complaint to establish vicarious liability. The burden of proving non-liability lies with the accused, who must demonstrate that they were not in charge of the company’s affairs at the relevant time.

In the present case, the court found that the complainant had made averments stating that accused No. 2 and accused No. 3 were responsible for the day-to-day affairs of the company. The court noted that accused No. 2 was the managing director and accused No. 3 was the father of accused No. 2, indicating their involvement in the company’s operations. The petitioner failed to provide any evidence or documentation to rebut these averments. Therefore, the court concluded that the petitioner should face the trial and establish his non-involvement during the proceedings.


The case serves as an important reminder of the principles governing vicarious liability in criminal proceedings. To establish liability, a complainant must make specific averments in the complaint, while the accused bears the burden of proving their non-involvement. Directors and individuals in charge of a company’s affairs can be held vicariously liable, but mere directorship alone does not establish liability. The court’s decision reaffirms the need for evidence and a fair trial to determine the guilt or innocence of the accused.

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