MP 1 WP1208_11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO. 1208 OF 2011 WITH CRIMINAL WRIT PETITION NO. 1209 OF 2011 WITH CRIMINAL WRIT PETITION NO. 1210 OF 2011 WITH CRIMINAL WRIT PETITION NO. 1211 OF 2011 WITH CRIMINAL WRIT PETITION NO. 1212 OF 2011 WITH CRIMINAL WRIT PETITION NO. 1213 OF 2011 Kotak Mahindra Bank Limited and others ... Petitioners Versus State of Maharashtra and another ... Respondents Mr. J. P. Cama, Senior Advocate, Mr. Rohaan Cama a/w. Mr. Vikram Trivedi, Mr. Faisal Sayyed, Mr. Shehzed Rasiwala, Advocates i/b. Manilal Kher Ambalal & Co. for Petitioners. Mrs. Lata Desai i/b. Ms Pallavi Divekar for the Respondent No. 2. Mr. D. R. More, APP for the State. CORAM : B. R. GAVAI, J. TUESDAY, JUNE 21, 2011 P. C. : Rule. Rule made returnable forthwith. Heard by consent. 2. The petitioners challenge the orders dated 16.11.2010, 26.08.2010, 23.11.2010, 26.08.2010, 01.12.2010 and 07.12.2010 passed by the learned Magistrate for the issuance of process in Complaint Nos. 8656/SS/2010, 8720/SS/2010, 11509/SS/2010, 8721/SS/2010, 11939/SS/ MP 2 WP1208_11 2010 and 13138/SS/2010 respectively filed by the respondent No. 2. The petitioner No. 1 Kotak Mahindra Bank Limited is a banking company within the meaning of the Banking Regulation Act, 1949. The petitioner company is having various offices situated at various places. The respondent No. 2 alleged that the petitioner No. 1 company, by not engaging the guards alloted to them and continuing to engage the guards through security agency, have committed an offence under Clause 42 (2) of The Private Security Guards (Regulation of Employment and Welfare) Scheme, 2002 (hereinafter referred to as the “said Scheme” for short). Insofar as the rest of the accused are concerned, they have been impleaded as accused with an averment that they are the directors or the vice presidents or senior officers, and as such, have ultimate control over the affairs and establishment of the accused / petitioner No. 1. The petitioners have, therefore, approached this Court contending that the criminal prosecution as initiated against them is not sustainable in law. 3. I had an occasion to consider an identical view in Criminal Writ Petition No. 1773 of 2009 with respect to the provisions of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 and the Scheme framed thereunder. After considering the submissions made by the parties, I have observed thus, “9. The definition of sub-section (3) of section 2 reveals that anemployer, in relation to a Security Guard in the direct employment of an agency or agent and deployed in a factory or establishment through such agency or agent, means such agency or agent. It can thus clearly be seen that the petitioner no.1 would clearly be covered by the said definition. A perusal of section 27 would reveal that any person, who contravenes any of the provision of the Act or any rule made thereunder on conviction is liable for penal consequences. Sub-clause (1) of clause 42 of the Scheme provides for penalties. The word used in clause 42 is “whoever” and, therefore, the petitioner no.1 would also be liable for penal MP 3 WP1208_11 consequences if contravention of any of the clauses mentioned in clause 42 is established against it. However, perusal of clause (2) would reveal that in order to make a proprietor, Partner, Director, Manager, Secretary or other Officer of the employer agency liable for the offence committed by the employer agency, it is necessary to prove that such Proprietor, Manager, Secretary or any other Officer has given his consent for committing such an offence or connived therefor or is attributable to any neglect. It is thus clear that in order to make any Proprietor, partner, Director or any officer of the employer liable for offence committed by the employer agency, it is necessary to establish any of the following three conditions:- (i) That the offence committed by the employer agency has been committed with the consent of the proprietor, etc. (ii) That it has been committed with connivance of the proprietor, etc (iii)It is attributable to any neglect on the part of the proprietor, etc. It is thus clear that unless any of the aforesaid conditions is satisfied, a proprietor or any person mentioned in sub-clause (2) of clause 42 cannot be held liable for an offence committed by an employer agency. 11. In the light of this legal position, let us examine the allegations made against the petitioner no.2. The only allegations against the petitioner no.2 is to be found in paragraph 2 which reads thus:- “2. Accused No.1 is an Establishment. Accused Nos.2 is M. Director of Accused No.1. He is the person who is incharge of and has ultimate control over the affairs of Accused No.1.” Apart from that, there is no allegation against the petitioner no.2. As already discussed hereinabove, merely because the petitioner no.2 is the Managing Director and is incharge and in ultimate control of the affairs of the petitioner no.1 cannot be a reason for making him liable for the offence punishable against the petitioner no.1. As discussed hereinabove, unless the statute provides for vicarious liability, by legal fiction, it would not be permissible. In any case, as discussed MP 4 WP1208_11 hereinabove, sub-clause (2) of clause 42 itself provides the eventualities in which a person responsible for the affairs of the employer agency can be held likable for the offence committed by the employer-agency. There is not a whisper in the complaint that the offence committed by the employer agency has been committed with the consent of the petitioner no.2 nor is there an averment that it has been done with the connivance of the petitioner no.2 nor is there any averment to the effect that the offence committed by the employer agency is on account of any neglect on the part of the petitioner no.2.” 4. Perusal of the present complaints would reveal that the allegations insofar as directors, officers, etc. against whom the criminal proceedings are initiated, are almost same as were made in the complaint that was for consideration before me in Criminal Writ Petition No. 1773 of 2009. In view of the view taken by me in the aforesaid case and in view of the absence of any specific allegations as required under sub- clause (2) of clause 42 of the said Scheme which would permit the criminal prosecution to proceed against the director, officer, etc., I find that the criminal proceedings against such persons would not be tenable in law. 5. In that view of the matter, the present writ petitions fail insofar as the petitioner No. 1 is concerned. The criminal proceedings shall stand quashed insofar as the rest of the accused in the aforesaid petitions are concerned. Needless to state that the complainant shall proceed with in accordance with law against the accused / petitioner No. 1. (B. R. GAVAI, J)