Dinesh Kumar Singh, J.

1. The present petition under Section 482 Cr.P.C. has been filed seeking quashing of the entire proceedings of Case Crime No.5694 of 2019 (State Vs. United Breweries Limited and others), arising out of FIR No.0260 of 2018 initially registered under Section 406 IPC, Police Station Husainganj, District Lucknow against Akhil Sharda, Branch Manager (Sales) Uttar Pradesh and Uttarakhand, Himanshu Tiwari and Arvind Padhi of M/s United Breweries Limited, office address at 626, 6th Floor, DLF, Tower-B, DDA, District Center, Jasaula, New Delhi-110044 having bond at Chapraula, G.T. Road, Tehsil Dadri, Noida-201301. During the course of investigation, Sections 420, 467, 468, 471 and 120-B IPC were added.

2. A challenge has also been made to the summoning order dated 3.4.2019 issued pursuant to the supplementary charge sheet dated 24.3.2019, upon which the learned Ist Additional Chief Judicial Magistrate, Court No.25, Lucknow took cognizance vide order dated 3.4.2019 and summoned the petitioners for facing the trial.

3. The petitioners have also challenged the judgment and order dated 24.12.2019 passed by the Additional Sessions Judge, Court No.1, Lucknow in Criminal Revision No.379 of 2019 filed by the petitioners against the order of cognizance and summoning dated 3.4.2019 passed by the learned trial court.

4. The facts of the case, in brief, are that the United Breweries Limited (Hereinafter referred to as “the Company”) is a company registered under the provisions of the Companies Act, 1956 having its registered office at UB Tower, VB City, 24, Vittal Mallya Road, Bangalure, Karnataka. The company is engaged in manufacture and sale of beer and other alcoholic beverages in India and worldwide. Petitioner Nos.1, 3, 5, 6, 7, 8 and 9 are part-time non-executive Directors, whereas petitioner nos.2 and 4 are former non-executive directors, whose term got completed on 4.9.2019 in the company. The specific stand of the petitioners in paragraph 30 of the petition is that the petitioners being non-executive directors, are not involved in operations relating to production and supply/delivery of goods of the company or in day-to-day business of the company.

5. Petitioner no.10 is the Company Secretary and authorized representative of the company, but he is also not involved in operations relating to production and supply/delivery of the goods of the company. In paragraph 31 of the petition, the particulars of the petitioners such as their designation, nature of work, their dates of appointment in the company as non-executive directors and the company secretary are given in a tabular form, which would read as under:-

6. Opposite party no.2 is Manager of Licensee Firm F.L.2B (Beehive Alcoveb) and this firm is engaged in business of sale of Beer etc, after purchasing the same from the company and other manufacturers.

7. As per the contents of the FIR lodged on a complaint of opposite party no.2 at Police Station Husainganj. Lucknow on 15.9.2018 against three employees of the company named in the FIR, the complainant placed an order for three trucks of Beer on 7.9.2018 and on 11.9.2018 through e-mail to Akhil Sharda, Branch Manager (Sales) Uttar Pradesh and Uttarakhand and made payment of Rs.65,66,152/- on 7.9.2028 and Rs.27,32,750/- on 11.9.2018, total amount of Rs.92,98,902/- by his banker, Federal Bank Limited, Cantt. Road, Lucknow. Despite making of the payment for there trucks of Beer, Akhil Sharda did not ensure the supply of the ordered Beer nor any proper reply was being given. The complainant was apprehensive that three employees named in the FIR had no intention to supply the ordered Beer and they wanted to misappropriate the amount paid by the complainant as under the Excise Rules, the supply was to be made within 72 hours of the order.

8. The first charge sheet was filed by the investigating officer on 10.2.2019 against the four accused persons, namely, Akhil Sharda, Himanshu Tiwari, Arvind Padhi and the United Breweries Limited, the company, under Sections 406, 420, 467, 468, 471 and 120-B IPC alleging that the four accused had prepared forged and fabricated documents in furtherance of the criminal conspiracy, and have caused loss to the excise revenue of the Government of Uttar Pradesh and, they had also cheated the complainant. Thereafter, two supplementary charge sheets dated 24.3.2019 and 27.6.2019 came to be submitted by the investigation officer.

9. In the first supplementary charge sheet dated 24.3.2019, name of the petitioners got figured as accused for committing the offences under Sections 406, 420, 467, 468, 471 and 120-B IPC. It is alleged that the petitioners together and in furtherance of criminal conspiracy had committed financial crime and these accused petitioners are habitual offenders against whom the offences under Sections 406, 420, 467, 468, 471 and 120-B IPC are very well made out on the basis of the evidence collected during the course of investigation.

10. Second supplementary charge sheet came to be filed against Abdul Haque, Happy Arora and Vivek Tiwari of three transport companies, namely, Sical Logistics Limited, New Fatehpur Calcutta Transport Company and Tiwari Transport Company respectively, and against the officers and share holders of the company alleging that they had prepared forged truck numbers and the driving licenses.

11. Petitioner no.5, Rudolf Gijsbert Servaas Van Den Brink was appointed as non-executive director only on 14.11.2018. Petitioner No.8, Christiaan A J Van Steenbergen and petitioner no.9 Stephen F Gerlich are permanently residing abroad.

12. Opposite party no.2 placed a demand order for two trucks load of Beer through e-mail, total 2360 cases to the company on 7.9.2018. This e-mail was also sent to the Assistant Excise Commissioner Web Distillery, Aligarh. As the next two days i.e. Saturday and Sunday were holidays, the process for supply of goods for which order was placed by opposite party party no.2, was initiated on 10.9.2018. In pursuance of the indent/demand order dated 7.9.2018 placed by opposite party no.2, the company directed its transporter Sical Logistics Limited to arrange vehicles for delivery of goods from its godown located at Noida to the Licensee at Lucknow. The transport permit (Form FL-36) was issued by the concerned Excise Officer on 11.9.2018 for supply of Beer by 13.9.2018. The consignment of Beer was dispatched on 11.9.2018 for delivery to the Licensee at Lucknow after payment of excise duty in advance through transporter of the company by Truck Nos.UP32 HN 3209 and UP32 FN 8048.

13. It is the case of the petitioners that the company sent the entire goods/Beer in respect to the demand order dated 7.9.2018 loaded aforesaid two trucks provided by its registered transporter namely, Sical Logistics Limited having GPS system in those trucks as mandated by the Excise Department’s Track and Trace Policy. It is further said that Sical Logistics Limited, registered transporter of the company, had arrangement for providing trucks for transportation services with New Fatehpur Calcutta Transport Company, who in turn hires trucks from open market. In this particular transaction, New Fatehpur Calcutta Transport Company had hired Truck Nos.UP32 HN 3209 and UP32 FN 8048 from Tiwari Transport Company for delivery of consignment of opposite party no.2 at Lucknow.

14. The aforesaid two trucks had to reach the destination on 13.9.2018. On 13.9.2018, location of both the trucks was tracked through GPS upto the outer limit of the Lucknow city, which was near about one and a half kilometer from the hotel Ramada Palace of opposite party no.2 and, thereafter, the GPS device of both trucks lost contact with GPS Tracker Agency, namely, QTS Solutions Private Limited after 11.41 hours on 13.9.2018. QTS Solutions Private Limited sent a message through e-mail on 14.9.2018 at 4.15 PM of one Mr. Dharam Chand, Depot In-charge of the company.

15. It is stated that Ashok Kumar Jaiswal, who manages the business of opposite party no.2, also runs Hotel Ramada, Near Bani Junabganj, Banthara, Lucknow, which is located at a distance of 1.5 Kms. from the place from where the trucks loaded with Beer went missing and which is specifically the same place from where the GPS fitted in the trucks stopped giving the track of the two trucks on 13.9.2018.

16. The Depot In-charge also informed to the officers of the company as well as the transporter, Sical Logistics Limited about the loss of trucks. The officers of the company also inquired about the trucks’ location from opposite party no.2 through telephone, but opposite party no.2 informed the company that the trucks had not yet reached the designated place i.e. 18, Station Road, Lucknow.

17. The fact of trucks loaded with Beer from the Depot of the company going missing, was brought to the notice of the District Excise Officer, who directed the company on 14.9.2018 to lodge the FIR at Police Station Badalpur, Gautam Budh Nagar. When the whereabouts of the trucks were not known, on 21.9.2018 the company requested consent of the licensee, opposite party no.2, through e-mail for re-supply of Beer against the order dated 7.9.2018 as the consent was required for issuance of transport permit (FL-36) afresh. The consent for re-supply was given by opposite party no.2 through e-mail on 22.9.2018. The licensee also informed the company that criminal proceedings have already been initiated at Police Station Husainganj, Lucknow with regard to non-supply of Beer and civil proceedings would be initiated for the losses suffered. After consent was given by the licensee on 22.9.2018, fresh Form FL-36 was issued by the concerned Excise Officer on 22.9.2018 itself and Beer was supplied on 22.9.2018 against the order dated 7.9.2018 after payment of excise duty in advance through transporter of the company. The supply of goods/Beer were delivered at the address of the licensee at Lucknow on 24.9.2018, which were accepted by the licensee, however, acknowledgment was not given by the licensee even after receipt of the goods. As the licensee did not acknowledge the delivery of goods, the drivers of the trucks contacted Excise Department and the Excise Inspector was deputed to verify the delivery of beer. The concerned Excise Officer inspected the location of the licensee and submitted his report dated 27.9.2018 that Beer ordered was duly received by the licensee at his premises.

18. The licensee had also placed another order dated 11.9.2018 at 8.30 PM through e-mail for delivery of 1180 cases of Beer at Varanasi. Since the vehicles of transportation of Beer to Varanasi could not be arranged and the transport Form FL-36 could not be issued, the licensee on 15.9.2018 modified its original order dated 11.9.2018 through e-mail instructing that the ordered beer be delivered at Lucknow instead of Varanasi. After receipt of revised order on 15.9.2018 with changed location, the vehicle was arranged and Form FL-36 was issued by the concerned Excise Officer on 17.9.2018 and on the same day, consignment of beer was dispatched after payment of excise duty in advance through transporter of the company, namely, Buland Logistic Limited by Truck No.UP81 BT 5285 from Aligarh to Lucknow and the consignment of beer was delivered and received by the licensee on 19.9.2018. It is stated that the goods were duly delivered as per the orders dated 7.9.2018 and 11.9.2018.

19. This Court in its detail interim order dated 17.1.2020 has noted the undisputed facts as under:-

“It is undisputed that for re-supply of the Beer, excise duty was duly paid to the Excise department, after which F.L. 36 was issued and the goods were supplied by the Company, which was duly received by the informant's side. It is also undisputed that initially, in Case Crime No. 260 of 2018 (supra), final report was prepared by the Investigating Officer on 13.10.2018. (Conclusion of the final report is appended at page 183 of the application). However, on the request of the Ashok Kumar Jaiswal, investigation was transferred to the Crime branch and charge sheet was prepared by the 2nd Investigating Officer on 10.02.2019 with the observation that there is a loss of U.P. Excise revenue. The charge sheet was prepared against the Company, Akhil Sharda, Arvind Padhi and Himanshu Tiwari with the allegation that by preparing a forged documents, the Company cheated the informant and also cause U.P. excise revenue loss. Thereafter, impugned supplementary charge sheet was prepared against the applicants on 24th March, 2019, which is annexed at pages 55 to 70 of the application.”

20. Sri G.S. Chaturvedi, learned Senior Advocate representing the petitioners has submitted that the opposite parties have not denied the averments made in paragraphs 30 and 31 of the petition, and if there is no evidence brought on record to show any involvement of the petitioners in the alleged offence, the criminal liability cannot be fixed only on the allegation that the accused are directors/share holders of the company without disclosing any role played by such a person in the entire transaction, which form part of the offence and subject matter of the FIR, and the charge sheet. He has further submitted that the impugned proceedings against the petitioners are nothing but a sheer abuse of process of law and Court and are manifestly unjust and illegal. The investigation has also been closed, and no further investigation is pending in the offence and the continuation of the proceedings against the petitioners would result only in their further harassment for alleged offences, which are not made out against them inasmuch as there is no evidence against them for their involvement in any manner for commission of alleged offences.

21. Sections 2(47), 149 and 150 deal with the independent directors which read as under :-

“2(47) "independent director" means an independent director referred to in sub-section (6) of section 149;

149. Company to have Board of Directors.__(1) Every company shall have a Board of Directors consisting of individuals as directors and shall have--

(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and

(b) a maximum of fifteen directors:

Provided that a company may appoint more than fifteen directors after passing a special resolution:

Provided further that such class or classes of companies as may be prescribed, shall have at least one woman director.

(2) Every company existing on or before the date of commencement of this Act shall within one year from such commencement comply with the requirements of the provisions of sub-section (1).

[(3) Every company shall have at least one director who stays in India for a total period of not less than one hundred and eighty-two days during the financial year:

Provided that in case of a newly incorporated company the requirement under this sub-section shall apply proportionately at the end of the financial year in which it is incorporated];

(4) Every listed public company shall have at least onethird of the total number of directors as independent directors and the Central Government may prescribe the minimum number of independent directors in case of any class or classes of public companies.

Explanation.-- For the purposes of this sub-section, any fraction contained in such one-third number shall be rounded off as one.

(5) Every company existing on or before the date of commencement of this Act shall, within one year from such commencement or from the date of notification of the rules in this regard as may be applicable, comply with the requirements of the provisions of sub-section (4).

(6) An independent director in relation to a company, means a director other than a managing director--

or a whole-time director or a nominee director,

(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

(b) (i) who is or was not a promoter of the company or its holding, subsidiary or associate company;

(ii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;

(c) who has or had no 2[pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten per cent. of his total income or such amount as may be prescribed,] with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

3[(d) none of whose relatives--

(i) is holding any security of or interest in the company, its holding, subsidiary or associate company during the two immediately preceding financial years or during the current financial year:

Provided that the relative may hold security or interest in the company of face value not exceeding fifty lakh rupees or two per cent. of the paid-up capital of the company, its holding, subsidiary or associate company or such higher sum as may be prescribed;

(ii) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors, in excess of such amount as may be prescribed during the two immediately preceding financial years or during the current financial year;

(iii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company, for such amount as may be prescribed during the two immediately preceding financial years or during the current financial year; or

(iv) has any other pecuniary transaction or relationship with the company, or its subsidiary, or its holding or associate company amounting to two per cent. or more of its gross turnover or total income singly or in combination with the transactions referred to in sub-clause (i), (ii) or (iii);].

(e) who, neither himself nor any of his relatives.

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

4[Provided that in case of a relative who is an employee, the restriction under this clause shall not apply for his employment during preceding three financial years.].

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of (A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm;

(iii) holds together with his relatives two per cent. or more of the total voting power of the company; or

(iv) is a Chief Executive or director, by whatever name called, of any nonprofit organisation that receives twentyfive per cent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent. or more of the total voting power of the company; or

(f) who possesses such other qualifications as may be prescribed.

(7) Every independent director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his status as an independent director, give a declaration that he meets the criteria of independence as provided in sub-section (6).

Explanation.-- For the purposes of this section, nominee director means a director nominated by any financial institution in pursuance of the provisions of any law for the time being in force, or of any agreement, or appointed by any Government, or any other person to represent its interests.

(8) The company and independent directors shall abide by the provisions specified in Schedule IV.

(9) Notwithstanding anything contained in any other provision of this Act, but subject to the provisions of sections 197 and 198, an independent director shall not be entitled to any stock option and may receive remuneration by way of fee provided under sub-section (5) of section 197, reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members.

5[Provided that if a company has no profits or its profits are inadequate, an independent director may receive remuneration, exclusive of any fees payable under subsection (5) of section 197, in accordance with the provisions of Schedule V.].

(10) Subject to the provisions of section 152, an independent director shall hold office for a term up to five consecutive years on the Board of a company, but shall be eligible for reappointment on passing of a special resolution by the company and disclosure of such appointment in the Board's report.

(11) Notwithstanding anything contained in sub-section (10), no independent director shall hold office for more than two consecutive terms, but such independent director shall be eligible for appointment after the expiration of three years of ceasing to become an independent director: Provided that an independent director shall not, during the said period of three years, be appointed in or be associated with the company in any other capacity, either directly or indirectly.

Explanation.-- For the purposes of sub-sections (10) and (11), any tenure of an independent director on the date of commencement of this Act shall not be counted as a term under those sub-sections.

(12) Notwithstanding anything contained in this Act,--

(i) an independent director;

(ii) a non-executive director not being promoter or key managerial personnel.

shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently.

(13) The provisions of sub-sections (6) and (7) of section 152 in respect of retirement of directors by rotation shall not be applicable to appointment of independent directors.

150. Manner of selection of independent directors and maintenance of data bank in independent directors.__

(1) Subject to the provisions contained in sub-section (6) of section 149, an independent director may be selected from a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, institute or association, as may by notified by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the use by the company making the appointment of such directors:

Provided that responsibility of exercising due diligence before selecting a person from the data bank referred to above, as an independent director shall lie with the company making such appointment.

(2) The appointment of independent director shall be approved by the company in general meeting as provided in sub-section (2) of section 152 and the explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director.

(3) The data bank referred to in sub-section (1), shall create and maintain data of persons willing to act as independent director in accordance with such rules as may be prescribed.

(4) The Central Government may prescribe the manner and procedure of selection of independent directors who fulfil the qualifications and requirements specified under section 149.”

22. Sri Chaturvedi has further submitted that the petitioners are independent non-executive directors of the company, they are in no manner responsible for day-to-day affairs of the company. Under the scheme of the Companies Act, such directors are engaged in the company for their expertise and special knowledge in a particular discipline and they are not responsible and in-charge of the management of the company. The non-executive director is not involved in the day-to-day affairs of the company or running of its business. Such director is not at all responsible for the day-to-day running of business of the company. There is no evidence collected during the course of investigation to suggest that the petitioners, who are non-executive directors and the secretary of the company, are responsible for conduct of the business of the company. He has, therefore, submitted that continuation of the proceedings against the petitioners is nothing but a gross abuse of process of the Court and to secure the ends of justice, the impugned proceedings are liable to be quashed.

23. In support of his contention, learned counsel for the petitioners has placed relation upon the recent judgement of the Supreme Court in the case of Sunita Palita Vs. M/s Panchami Stone Quarry, (2022) SCC Online SWC 945.

24. On the other hand, Sri Prashant Chandra, learned Senior Advocate assisted by Ms. Radhika Singh, learned counsel for opposite party no.2 has submitted that the initial charge sheet filed against Akhil Sharda and three others in the present case, was challenged before this Court in a petition under Section 482 Cr.P.C. being Criminal Misc. Case No.2005 of 2019 and this Court vide judgement and order dated 6.3.2020 quashed the charge sheet. Against the said order dated 6.3.2020, Criminal Appeal Nos.840 and 841 of 2020 were filed before the Supreme Court and the Supreme Court directed for restoration of the proceedings before the trial court. The Supreme Court has observed in its judgment and order dated 11.7.2022 that the High Court has not properly appreciated and/or considered the larger conspiracy and that both the FIR Nos.260 of 2018 and 227 of 2019 relating to disappearance of the trucks loaded with beer and by forging the documents etc. for evasion of excise duty are interconnected. It had come during the investigation that there were other instances of disappearance of the trucks loaded with beer indicating that there was syndicate operating with connivance of the company and its officers and the modus operandi which had been adopted for evasion of the excise duty, was a serious matter. Therefore, involvement of the petitioners would not be ruled out at this stage.

25. Learned counsel for opposite party no.2 has further submitted that considering the judgement and order dated 11.7.2022 passed by the Supreme Court, any interference in the impugned proceedings against the petitioners, would be overreaching the decision of the Supreme Court. He has also submitted that even if it is assumed that there is some distinction in the facts of the present case than the facts of Case Crime No.205 of 2019, the only course open to the petitioners would be to seek an appropriate direction from the Supreme Court. Whether the petitioners have a criminal intent and direct nexus with the alleged offence, is a matter of trial. The responsibility of the director is a matter, which is to be examined only during the trial. There is a charge of criminal conspiracy levelled against all the directors of the company for consistent disappearance of the trucks coupled with evasion of the excise duty, their involvement and the role played by each director can be decided only in a trial.

26. In support of the aforesaid submission, learned counsel for opposite party no.2 has placed reliance upon the judgment of the Supreme Court rendered in the case of Shiv Kumar Jatia Vs. State of NCT of Delhi, (2019) 17 SCC 193 [LQ/SC/2019/1319] .

27. Learned counsel for opposite party no.2 has further submitted that the reliance placed by the learned counsel for the petitioners on the case of Sunita Palita (supra) is not appropriate as the said case was arising out of a complaint and not from the FIR. The necessity to be precise and specific in the complaint, cannot be compared within the generality of an FIR inasmuch as the FIR is not an encyclopedia of facts, and it is not expected from a victim to give every detail of the incident either in the FIR or in the brief history given to the doctor. The said case of Sunita Palita (supra) was a case under Section 141 of Negotiable Instrument Act and the same is not relevant to the facts of the present case.

28. Learned counsel for opposite party no.2 has further submitted that non-executive director not being a promoter or a team managerial personnel can be held liable in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board proceedings, and with his consent or connivance or where he had not acted diligently as provided under sub-section 12 (ii) of Section 149 of the Companies Act. He has also submitted that the charge sheet discloses the connivance of all the directors and, therefore, to quash the proceedings only on the ground that the petitioners are non-executive directors, would frustrate the very trial. Merely because one or two directors have taken a plea of being far away from the place of incident, all the petitioners cannot be discharged or exempted from facing the trial. The trial alone can determine the extent of involvement and conspiracy for which there cannot be any evidence which can be seen before the commencement of the trial. The complicity is all what is required to be present and this attribute is conspicuously glaring on the face of record. He has further submitted that the Supreme Court consistently has held not to nip the trial in the bud. (paragraph 30 of Ramveer Upadhyay and another Vs. State of U.P. and another (2022) SCC Online SC 484).

29. Learned counsel for opposite party no.2 has further submitted that there is a charge of criminal conspiracy under Section 120-B IPC. The doctrine of attribution and imputation has to be applied. The degree of control exercised by a person, can only be determined upon trial. The charge of conspiracy is not amenable to examination under Section 482 Cr.P.C as it is the domain of the trial court to weigh the evidence and come to a conclusion as to the degree of the control exercised by the person and in doing so the principle of alter ego is applied. Here the question is not of vicarious liability inasmuch as all the directors were involved, including the petitioners, and they conspired, which is evident from detailed discussions in the board meetings, in which even the agreement between the tainted transporters and the company had been ratified. The agreement with the transporter was executed with the consent and sanction of all the high officials of the company, including the petitioners. The directors had full knowledge of the repercussions of the conscious decision they had taken on account of which the criminal acts were committed, and in fact were being committed, as is apparent from regular disappearances of trucks loaded with beer. A systematic activity in the company cannot be without the knowledge, consent and connivance of the petitionersdirectors. He has further submitted that this Court while exercising the power under Section 482 Cr.P.C., should not weigh the evidence. This Court should allow the trial to proceed in which the complicity of the petitioners can be determined. This Court is not required to interfere by holding a roving inquiry. He has also submitted that in view of the judgement of the Supreme Court dated 11.7.2022, the petition is liable to be dismissed.

30. I have heard Mr. G.S. Chaturvedi, learned Senior Advocate, assisted by Mr. Purnendu Chakravarthy and Mr. Baljeet Singh, appearing for the petitioners, Mr. V.K. Shahi, learned Additional Advocate General and Mr. Anurag Varma, learned Additional Government Advocate, representing opposite party nos.1, 3 and 4, as well as Mr. Prashant Chandra, learned Senior Advocate, assisted by Ms. Radhika Singh, Advocate, representing opposite party no.2.

31. The powers of the High Court to quash criminal proceedings in exercise of its jurisdiction under Section 482 Cr.P.C. is well-known. The High Court may not enter into determination of the disputed questions of fact at the stage of its exercise of powers under section 482 Cr.P.C, however, the Court may examine and take note of the facts and allegations in order to find out whether the impugned proceedings are in abuse of the process of the court and law and their continuance would result in miscarriage of justice or not.

32. In the present case the facts, as noted above, are not in dispute. The petitioners are/were part-time non-executive Directors of the Company. Neither the FIR nor the charge-sheet would disclose as to how and what manner the petitioners were responsible for the day-today conduct of business of the Company or otherwise responsible in its day to day functioning.

33. The question which arises for consideration in the present case is that whether the petitioners are personally liable for any offence even if the allegations in the FIR and charge-sheet are taken on their face value to be correct in entirety. The Company is a body incorporated under the Companies Act. Vicarious criminal liability of its Directors and Shareholders would arise provided any provision exists in that behalf in the statute. The Statute must contain provision fixing such a vicarious liability. Even for the said purpose, it would be obligatory on the part of the complainant and the investigating agency to make requisite allegations and collect evidence in support thereof which would attract provisions constituting vicarious liability.

34. In the facts of the present case, it is not in dispute that order for supply of beer by respondent No.2 was placed through Ahkil Sarda, Depot Manager. The petitioners have no role in receiving the order of effecting the supply. They are the part time Directors based on different locations who have been appointed as independent Directors under the provisions of Section 149/150 of the Companies Act, 2013 having regard to their qualifications, expertise etc. If the petitioners have not been involved in the alleged transactions at any point of time, vicarious criminal liability cannot be fixed upon the petitioners.

35. The Supreme Court in the case of Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749 [LQ/SC/1997/1443] has held that summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set in motion as the matter of course for alleged offences. It would be apt to take notice of para 28 of the aforesaid judgment which reads as under:-

"28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."

36. The petitioners have been made accused with the aid of Section 120B IPC. It is well settled that individual who has perpetrated commission of offence on behalf of the Company can be made an accused along with the Company, if there is sufficient evidence of his active role coupled with criminal intent. A person working in a Company also can be made an accused and implicated if there is specific role/allegation which attracts doctrine of vicarious liability. In absence of any of two aforesaid situations, when the Company is offender, vicarious liability of the Directors cannot be imputed automatically.

37. The Supreme Court in the case of Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 [LQ/SC/2015/34] while dealing with the issue of vicarious liability of the Officers, Directors, Managing Directors, Chairman of the Company in para 42 to 44 has held as under:-

"42. No doubt, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.

43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.

44. When the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. One such example is Section 141 of the Negotiable Instruments Act, 1881. In Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 [LQ/SC/2012/406] : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] [LQ/SC/2012/406] , the Court noted that if a group of persons that guide the business of the company have the criminal intent, that would be imputed to the body corporate and it is in this backdrop, Section 141 of the Negotiable Instruments Act has to be understood. Such a position is, therefore, because of statutory intendment making it a deeming fiction. Here also, the principle of “alter ego”, was applied only in one direction, namely, where a group of persons that guide the business had criminal intent, that is to be imputed to the body corporate and not the vice versa. Otherwise, there has to be a specific act attributed to the Director or any other person allegedly in control and management of the company, to the effect that such a person was responsible for the acts committed by or on behalf of the company."

38. While issuing summons against the petitioners, the Magistrate has not recorded his satisfaction by mentioning role played by the petitioners which would bring them within offence allegedly committed on behalf of the Company. It is sine qua non for taking cognizance for an offence, the application of mind by the learned Magistrate and his satisfaction with the allegations that if proved, would constitute an offence. The Magistrate is bound to consider the question while taking cognizance on a complaint or a police report as to whether the same discloses commission of offence against a person who is being summoned.

39. Paragraphs 48 to 50 of the judgment rendered in the case of Sunil Bharti Mittal (supra), which are relevant, read as under:-

"48. Sine qua non for taking cognizance of the offence is the application of mind by the Magistrate and his satisfaction that the allegations, if proved, would constitute an offence. It is, therefore, imperative that on a complaint or on a police report, the Magistrate is bound to consider the question as to whether the same discloses commission of an offence and is required to form such an opinion in this respect. When he does so and decides to issue process, he shall be said to have taken cognizance. At the stage of taking cognizance, the only consideration before the court remains to consider judiciously whether the material on which the prosecution proposes to prosecute the accused brings out a prima facie case or not.

49. Cognizance of an offence and prosecution of an offender are two different things. Section 190 of the Code empowered taking cognizance of an offence and not to deal with offenders. Therefore, cognizance can be taken even if offender is not known or named when the complaint is filed or FIR registered. Their names may transpire during investigation or afterwards.

50. Person who has not joined as accused in the chargesheet can be summoned at the stage of taking cognizance under Section 190 of the Code. There is no question of applicability of Section 319 of the Code at this stage (see SWIL Ltd. v. State of Delhi [(2001) 6 SCC 670 [LQ/SC/2001/1737 ;] : 2001 SCC (Cri) 1205] [LQ/SC/2001/1737 ;] ). It is also trite that even if a person is not named as an accused by the police in the final report submitted, the court would be justified in taking cognizance of the offence and to summon the accused if it feels that the evidence and material collected during investigation justifies prosecution of the accused (see Union of India v. Prakash P. Hinduja [(2003) 6 SCC 195 [LQ/SC/2003/631] : 2003 SCC (Cri) 1314] [LQ/SC/2003/631] ). Thus, the Magistrate is empowered to issue process against some other person, who has not been charge-sheeted, but there has to be sufficient material in the police report showing his involvement. In that case, the Magistrate is empowered to ignore the conclusion arrived at by the investigating officer and apply his mind independently on the facts emerging from the investigation and take cognizance of the case. At the same time, it is not permissible at this stage to consider any material other than that collected by the investigating officer."

40. An Officer, Director, Managing Director or Chairman of the Company can be made an accused along with the Company only if there is sufficient material to prove his active role coupled with criminal intent. Indian Penal Code does not contain any provision for vicarious liability. For Managing Director or Director to be accused and their implications in the offence allegedly committed on behalf of the company, when the accused is a Company, the complaint/FIR or Charge-sheet must contain requisite allegations of commission of the offence by such individual(s).

41. The Supreme Court in the case of Shiv Kumar Jatia (supra) in paras 21 and 22 while dealing with vicarious liability of Managing Director of the Company has held as under:-

"21. By applying the ratio laid down by this Court in Sunil Bharti Mittal [Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 [LQ/SC/2015/34] : (2015) 2 SCC (Cri) 687] it is clear that an individual either as a Director or a Managing Director or Chairman of the company can be made an accused, along with the company, only if there is sufficient material to prove his active role coupled with the criminal intent. Further the criminal intent alleged must have direct nexus with the accused. Further in Maksud Saiyed v. State of Gujarat [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668 [LQ/SC/2007/1133] : (2008) 2 SCC (Cri) 692] this Court has examined the vicarious liability of Directors for the charges levelled against the Company. In the aforesaid judgment this Court has held that, the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company, when the accused is a company. It is held that vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further held that statutes indisputably must provide fixing such vicarious liability. It is also held that, even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability.

22. In the judgment of this Court in Sharad Kumar Sanghi v. Sangita Rane [Sharad Kumar Sanghi v. Sangita Rane, (2015) 12 SCC 781 [LQ/SC/2015/188] : (2016) 1 SCC (Cri) 159] while examining the allegations made against the Managing Director of a Company, in which, company was not made a party, this Court has held that when the allegations made against the Managing Director are vague in nature, same can be the ground for quashing the proceedings under Section 482 CrPC. In the case on hand principally the allegations are made against the first accused company which runs Hotel Hyatt Regency. At the same time, the Managing Director of such company who is Accused 2 is a party by making vague allegations that he was attending all the meetings of the company and various decisions were being taken under his signatures. Applying the ratio laid down in the aforesaid cases, it is clear that principally the allegations are made only against the company and other staff members who are incharge of day-to-day affairs of the company. In the absence of specific allegations against the Managing Director of the company and having regard to nature of allegations made which are vague in nature, we are of the view that it is a fit case for quashing the proceedings, so far as the Managing Director is concerned."

42. A Director that too a part time Director and the Secretary are not in charge or responsible of the conduct of the business of the Company. Even otherwise a full time Director who was not in charge or responsible of conduct of the business of the Company at the relevant time cannot be liable for a criminal offence allegedly committed on behalf of the Company at the relevant time.

43. The Supreme court in recent judgment in the case of Sunita Palita (supra), which was rendered in respect of criminal liability of a part time Director for offence committed under Section 138/141 in respect of liability of Directors has held as under :-

"42. A Director of a company who was not in charge or responsible for the conduct of the business of the company at the relevant time, will not be liable under those provisions. As held by this Court in, inter alia, S.M.S. Pharmaceuticals Ltd. (supra), the liability under Section 138/141 of the NI Act arises from being in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, and not on the basis of merely holding a designation or office in a company. It would be a travesty of justice to drag Directors, who may not even be connected with the issuance of a cheque or dishonour thereof, such as Director (Personnel), Director (Human Resources Development) etc. into criminal proceedings under the NI Act, only because of their designation.

43. Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals Ltd. (supra). The materials on record clearly show that these Appellants were independent, non-executive Directors of the company. As held by this Court in Pooja Ravinder Devidasani v. State of Maharashtra (supra) a non-Executive Director is not involved in the day-to-day affairs of the company or in the running of its business. Such Director is in no way responsible for the day-to-day running of the Accused Company. Moreover, when a complaint is filed against a Director of the company, who is not the signatory of the dishonoured cheque, specific averments have to be made in the pleadings to substantiate the contention in the complaint, that such Director was in charge of and responsible for conduct of the business of the Company or the Company, unless such Director is the designated Managing Director or Joint Managing Director who would obviously be responsible for the company and/or its business and affairs."

44. In view of the aforesaid discussion and the law, this Court is of the considered view that the petitioners who are/were part time Directors of the Company cannot be held responsible for the alleged offence committed on behalf of the Company inasmuch as there is nothing on record which would suggest that they were responsible in any manner for receiving the order for supply of beer or alleged evasion of excise duty. Continuance of the proceedings against the petitioners would be wholly unjustified and uncalled for and end of justice would meet if the impugned proceedings are quashed against the petitioners.

45. In the result, petition is allowed and the entire proceedings of Case Crime No.5694 of 2019 (State Vs. United Breweries Limited and others), arising out of FIR No.0260 of 2018, under Sections 406, 420, 467, 468, 471 and 120-B IPC, Police Station Husainganj, District Lucknow, pending in the court of Ist Additional Chief Judicial Magistrate, Court No.25, Lucknow in respect of the petitioners, are hereby quashed.