The Andhra Pradesh High Court has affirmed that the mere fact of being a director of a company does not automatically render one liable for criminal offences committed by the entity, particularly where no specific overt acts are attributed to the accused after the charge sheet has been filed. In a significant ruling under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, the Court extended interim protection to an accused who had ceased his directorship prior to the registration of the case.
Background & Facts
The Dispute
Criminal Case No. 470 of 2024, registered at Tirupati East Police Station, involves allegations of large-scale adulteration of cow ghee supplied to the Tirumala Tirupati Devasthanams (TTD), along with corruption and violations under the Food Safety and Standards Act, 2006, and the Prevention of Corruption Act. The accused include 20 individuals, among them the petitioner, Rajesh Mansukhlal Chavda, alias Rajesh Kumar Chavda, who was the Director of M/s. Sri Vyshnavi Dairy Products Pvt. Ltd.
Key Facts
- The petitioner was appointed Director of Sri Vyshnavi Dairy Products Pvt. Ltd. prior to 2024
- He ceased to be a Director effective 15.01.2024
- Crime No. 470 of 2024 was registered on 12.02.2024
- The charge sheet was filed on or before 10.03.2025
- Alleged offences include:
- Sections 274, 275, 316(5), 318(3), 318(4), 61(2), 299, 336(3), 340(2) read with Sections 49 and 3(5) of Bharatiya Nyaya Sanhita, 2023
- Sections 51 and 59 of the Food Safety and Standards Act, 2006
- Sections 7 and 8 of the Prevention of Corruption Act, 1988
- The petitioner was named as Accused No. 20 in the charge sheet
- No specific overt acts, direct involvement, or documentary evidence linking the petitioner to the adulteration or bribery were cited in the charge sheet
- A notice under Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023, was issued to the petitioner
Procedural History
- 12.02.2024: Crime No. 470 of 2024 registered at Tirupati East Police Station
- 15.01.2024: Petitioner ceased to be Director of Sri Vyshnavi Dairy Products Pvt. Ltd.
- 10.03.2025: Charge sheet filed by CBI
- Before 16.03.2025: Interim protection granted to petitioner by the Court
- 16.03.2026: Criminal Petition No. 11195/2025 filed under Section 482 BNSS seeking anticipatory bail
- 16.03.2026: Hearing conducted before Dr. Justice Venkata Jyothirmai Pratapa
The Parties' Positions
Petitioner’s Position: The petitioner is not implicated by any specific act or conduct in the charge sheet. He had resigned as Director before the offence was registered. He has no role in the day-to-day operations of the company during the relevant period. He is willing to cooperate fully and furnish surety.
Respondent’s Position: As a former Director, the petitioner is vicariously liable for the company’s actions. The investigation reveals his involvement in the supply chain of adulterated ghee. He has not cooperated with the investigation and holds a crucial position in the conspiracy.
Relief Sought
The petitioner sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to protect himself from arrest pending trial.
The Legal Issue
Whether anticipatory bail can be granted to an accused who has ceased to hold a position of responsibility prior to the registration of the offence, where the charge sheet contains no specific allegations of overt acts attributable to him?
Arguments Presented
For the Petitioner
Learned counsel for the petitioner relied on the principle that anticipatory bail is a preventive remedy meant to shield individuals from arbitrary arrest, particularly where no direct involvement is established. He emphasized that the petitioner’s resignation as Director on 15.01.2024 preceded the registration of the case on 12.02.2024. He argued that the charge sheet does not attribute any specific act, communication, transaction, or decision to the petitioner. He cited Arnesh Kumar v. State of Bihar to underscore that mere position or association cannot substitute for specific allegations. He further submitted that the petitioner has been cooperative and is ready to furnish surety.
For the Respondent
The Special Public Prosecutor for CBI contended that the petitioner, as Director during the relevant period, bore supervisory responsibility for the company’s operations. He argued that the charge sheet, though not detailing individual acts, collectively implicates the petitioner through his role in the corporate structure. He asserted that the petitioner’s non-cooperation during investigation and his potential to influence witnesses or tamper with evidence warranted denial of anticipatory bail.
The Court's Analysis
The Court observed that the investigation has been completed and the charge sheet filed, indicating that the prosecution has had sufficient opportunity to gather evidence against all accused, including the petitioner. The Court noted that while the petitioner was named as Accused No. 20, the charge sheet does not contain any specific allegations of overt acts, direct participation, or personal benefit attributable to him. The Court emphasized that the mere fact of being a director does not, by itself, attract criminal liability under the provisions invoked, particularly where no nexus between the accused’s conduct and the alleged offences is established.
"The investigation with regard to the Petitioner has already been completed and the charge sheet has also been filed. Further, this Court had earlier granted interim protection to the Petitioner, which is in force as on date."
The Court held that continuation of the interim protection already granted is sufficient to balance the interests of justice and the rights of the accused. It rejected the State’s argument that non-cooperation justifies denial, noting that the petitioner had not been formally summoned or questioned, and that the conditions to be imposed would ensure cooperation going forward. The Court distinguished this case from those involving active concealment, destruction of evidence, or flight risk, none of which were substantiated against the petitioner.
The Verdict
The Criminal Petition is disposed of. The interim protection previously granted to the petitioner shall continue subject to the following conditions: (i) The petitioner shall fully cooperate with the investigation and make himself available for interrogation upon notice; (ii) He shall not contact, threaten, or influence any witness; (iii) He shall not tamper with prosecution evidence; (iv) He shall not leave the country without prior court permission and shall deposit his passport within one week of receiving a copy of this order; (v) He shall furnish his residential address and active mobile number to the Investigating Officer and shall not change them without prior intimation. All pending applications are closed.
What This Means For Similar Cases
Position Alone Is Not Sufficient for Criminal Liability
- Practitioners must challenge the inclusion of corporate officers in charge sheets where no specific acts are attributed to them
- Mere directorship, especially post-resignation, cannot be the sole basis for invoking criminal liability under BNS or PC Act
- Charge sheets must clearly articulate individual conduct, not rely on vicarious liability without factual grounding
Interim Protection Can Be Extended as De Facto Anticipatory Bail
- Courts may continue interim protection granted pre-charge sheet as a substitute for formal anticipatory bail when investigation is complete
- This avoids unnecessary arrest while preserving procedural fairness
- Petitioners should seek interim protection early and maintain compliance to strengthen their position
Conditions Are Non-Negotiable for Continued Protection
- Courts will impose strict conditions on cooperation, witness protection, and travel restrictions
- Failure to comply with any condition may result in immediate cancellation of protection and arrest
- Practitioners must advise clients to strictly adhere to all court-imposed obligations, including passport deposit and address disclosure
