The judgment is with reference to the default in the labour law but the ration laid down could apply with full force in relation to penal provisions under other fiscal laws as well including GST, Income-tax, Foreign Exchange etc.

In the case of Doyle De’souza Vs Govt of India through Deputy Chief Labour Commissioner,  Supreme Court was dealing with the summons which were issued to the director of a Company M/s Writer Safeguards Pvt ltd as well as head of Madhya Pradesh Unit which was managing ATMs for State Bank of India, for non compliances of the provisions of Minimum Wages Act, 1948 .

The Court considered the provisions of Section 22C of the Act which were invoked and the meaning of the expression “when a person can be in charge of, and responsible to , the company for the conduct of business of the Company” and held that “in-charge” must mean that the person should be in over-all control of the day to day business of the company or firm. The court also distinguished the fact that simply because a person was a director or partner did not mean that he can be said to be in charge of, and responsible to , the company by observing that there can be directors who merely lay down the policy and are not concerned with the day to day working of the company. Consequently, the mere fact that the accused person is a partner or director of the Company, shall not make him criminally liable for the offence committed by the Company unless the other ingredients are established which make him criminally liable. The Court relied on catena of Judicial decisions in this regard and the famous case of Hindustan Steels Vs State of Orissa and the fact that there was no assertion in the summon that the person summoned was in charge of and responsible for the affairs of the company and the offence having not been first established in the name of company, the summons were liable to be quashed.

The copy of the order is as under: