The High Court of Telangana has delivered an important decision on the issue regarding criminal liability of Directors and corporate governance.
In quashing the proceedings initiated against the petitioner (former Director of a pharmaceutical company), Justice K Sujana held that the petitioner could not be held responsible for alleged violations by the accused-company since he had relinquished his position as Director at the time such offences were alleged to have occurred.
The ruling reaffirmed the principles laid down by the Supreme Court regarding vicarious liability of directors in corporate offenses. It elucidated that merely being a director does not automatically implicate an individual in criminal liability and the individual…
