Directors/ managers can't be prosecuted and punished merely because the Company violated the law

Last updated: 07 December 2021
Quick Summary
The Supreme Court has ruled that company directors and managers cannot be prosecuted simply for their position if the company breaks the law. To hold them personally liable, it must be proven that the offence was committed with their consent or connivance, or was due to their neglect. This decision aims to prevent the unnecessary prosecution of individuals who have no direct involvement in a company's wrongdoing.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court ("SC") in the matter of Dayle De'Souza v. Government of India [SPECIAL LEAVE PETITION (CRL.) NO. 3913 OF 2020 dated October 29, 2021], held that a person cannot be prosecuted and punished merely because of their status or position as a director, manager, secretary or any other officer in a company unless the offence in question was committed with their consent or connivance or is attributable to any neglect on their part.

Citation :
SPECIAL LEAVE PETITION (CRL.) NO. 3913 OF 2020 dated October 29, 2021

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