Supreme Court Quashes Criminal Proceedings Against Directors in Punjab Land Preservation Act Case
Case Name: Sanjay Dutt & Others v. State of Haryana & Another
Citation: Criminal Appeal No. 11 of 2025 (@ SLP (Crl.) No. 7464 of 2024); 2025 INSC 34
Date of Judgment: 2 January 2025
Bench: Justice J.B. Pardiwala and Justice R. Mahadevan (DB)
Held: The Supreme Court held that in the absence of a statutory provision creating vicarious liability, directors and officers of a company cannot be prosecuted for offences allegedly committed by the company. Liability in criminal law is individual and requires specific allegations of direct involvement. Since the Punjab Land Preservation Act, 1900 does not provide for vicarious liability, directors cannot automatically be summoned merely because the company was granted license to develop land where trees were allegedly uprooted.
Summary: A complaint was filed by the Range Forest Officer, Gurugram, alleging that 256 trees had been illegally uprooted with a JCB at Sector-113, Bajgera, Gurugram, in violation of Section 4 of the Punjab Land Preservation Act, 1900, punishable under Section 19 of the Act. The complaint named three individuals—Sanjay Dutt (Director), Kamal Sehgal (General Manager), and Satpal Singh (Project Manager)—as accused, though the company itself, which held the license for development, was not arrayed as a party. The Special Environment Court, Faridabad, took cognizance and issued summons, which was later upheld by the Punjab & Haryana High Court in a petition under Section 482 CrPC.
On appeal, the Supreme Court emphasized that criminal law recognizes no vicarious liability unless specifically provided by statute. It observed that while a company may be liable for the wrongful acts of its employees, directors and officers are not automatically culpable. To prosecute them, the complaint must contain specific allegations showing personal involvement, criminal intent, or acts beyond routine corporate functions. Mere supervisory roles or positions held in the company are insufficient. The Court relied on Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. (2010) 10 SCC 479 and S.K. Alagh v. State of U.P. (2008) 5 SCC 662 to reaffirm that directors cannot be held liable simply because the company is alleged to have committed an offence.
The Court noted that the complaint against the appellants contained only vague allegations, with no assertion that they personally ordered or participated in the felling of trees. Strikingly, those physically found on site had not been named as accused, while the directors were proceeded against. This, according to the Court, was a fundamental defect. Since the PLPA contains no provision imposing vicarious liability, the prosecution of the directors was unsustainable.
Decision: The Supreme Court allowed the appeal, quashed the complaint and the orders of cognizance against the appellants, and clarified that if there was any breach of licensing conditions, proceedings could be taken against the company itself. Pending applications were also disposed of.