The Bombay High Court has clarified that mere directorship of a company is insufficient to attract criminal liability under the Legal Metrology Act. The judgment reinforces the principle that specific, factual allegations must establish a director's personal involvement in the alleged offence, particularly where the company itself is not arrayed as an accused.
Background & Facts
The Dispute
The complaint alleged that packaged consumer goods, specifically Sensodyne Ultra-Sensitive Fresh Gel, were sold without mandatory declarations on the packaging - such as the manufacturer’s name, address, and total number of retail packages - as required under Rule 24 of the Legal Metrology (Packaged Commodities) Rules, 2011. The Inspector of Legal Metrology filed a summary criminal case against Mukesh Butani, an independent director of M/s Glaxo Smithkline Consumer Healthcare Limited, for an offence under Section 36(1) of the Legal Metrology Act, 2009.
Procedural History
- 2015: Summary Criminal Case No.1129/2015 filed before the 5th Joint Civil Judge Junior Division and Judicial Magistrate First Class, Amravati.
- 2025: Mukesh Butani filed Criminal Application (APL) No.716 of 2025 under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 seeking quashing of proceedings against him.
- 2026: The Bombay High Court heard the application and delivered judgment on 3 February 2026.
Relief Sought
The applicant sought quashing of the criminal proceedings against him on the grounds that the complaint failed to allege any specific role, responsibility, or involvement in the alleged violation. He argued that the company was not named as an accused and no averments connected him to the day-to-day management of the business.
The Legal Issue
The central question was whether Section 49(1)(a)(ii) of the Legal Metrology Act, 2009 permits the prosecution of a director in the absence of specific allegations establishing that he was in charge of, and responsible to, the company for the conduct of its business at the time of the alleged offence.
Arguments Presented
For the Petitioner
The petitioner relied on Pepsico India Holdings Private Limited v. Food Inspector (2011) 1 SCC 176 and Sharad Kumar Sanghi v. Sangita Rane (2015) 12 SCC 781 to argue that a bald assertion of directorship without any factual nexus to the commission of the offence is legally insufficient. He emphasized that the complaint did not allege his involvement in procurement, packaging, labeling, or distribution of the goods. He further noted that the company had been merged with Hindustan Unilever Limited in 2020, rendering the allegations against him even more untenable.
For the Respondent/State
The State contended that as a director, the applicant was presumed to be responsible for the company’s compliance with statutory obligations. It argued that the Magistrate was entitled to draw an inference of responsibility from the director’s position, and that the complaint, though brief, was sufficient to initiate proceedings under Section 190 CrPC.
The Court's Analysis
The Court undertook a rigorous statutory interpretation of Section 49(1)(a)(ii) of the Legal Metrology Act, 2009, which provides for vicarious liability of directors only if they were "in charge of, and responsible to, the company for the conduct of the business of the company" at the time of the offence. The Court held that this provision cannot be invoked by implication or presumption.
"A mere bald statement that a person was a Director of the Company against which certain allegations had been made is not sufficient to make such Director liable in the absence of any specific allegations regarding his role in the management of the Company."
The Court emphasized that the complaint was entirely silent on the applicant’s role. No averments were made regarding his authority over packaging, labeling, or distribution. The fact that the company was not named as an accused further undermined the basis for invoking vicarious liability under Section 49. The Court distinguished this case from those where the company is arrayed as an accused and the director is jointly prosecuted.
The Court also invoked Pepsi Foods Ltd. v. Special Judicial Magistrate (1998) 5 SCC 749 to underscore that summoning an accused is a serious judicial act requiring the Magistrate to apply his mind and record satisfaction of a prima facie case. Here, the Magistrate had failed to do so, and the complaint, even if accepted in full, did not disclose personal liability of the applicant.
The Court further noted that the merger of the company in 2020 rendered the allegations against the applicant as an independent director of a defunct entity legally unsustainable.
The Verdict
The petitioner won. The Court held that vicarious liability of a director under Section 49(1)(a)(ii) of the Legal Metrology Act requires specific, factual allegations linking the director to the commission of the offence. The criminal proceedings against the applicant were quashed, and all summonses and orders issued against him were set aside.
What This Means For Similar Cases
Vicarious Liability Cannot Be Presumed
- Practitioners must now insist that complaints against directors contain precise averments about their functional role, authority, and direct involvement in the alleged violation.
- Mere allegations of directorship, without reference to operational control, are legally inadequate to sustain prosecution.
Company Must Be Arrayed as Accused for Director Liability to Apply
- If the company is not named as an accused, prosecution of directors under statutory vicarious liability provisions becomes legally untenable.
- This principle applies across statutes with similar vicarious liability clauses, including the Companies Act, 2013, and the Consumer Protection Act, 2019.
Magistrates Must Record Prima Facie Satisfaction
- Magistrates are under a mandatory duty to record reasons for summoning directors under Section 200 CrPC.
- Failure to do so renders the summoning order vulnerable to quashing under Section 482 CrPC or Section 528 BNSS.
- Practitioners should routinely challenge summoning orders where no such record exists.
