If the Director is himself involved in the offence in his personal capacity (and not merely because he is Director of company which is involved), then it is not mandatory that the company must also be arraigned as an accused in the case. It will depend on facts of the case in that situation, i.e., if the company is also involved then it may be named as accused.
But, if the Director of the company is being named as an accused, ONLY BECAUSE the offence has been committed by the company itself under the Unlawful Activities (Prevention) Act, 1967 (UAP Act), and he is being named as accused by virtue of Section 22-A of the Act, in that case it is mandatory to also name the company as an accused. However, there may be one exception to this rule, i.e., where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted, i.e., if for some legal impediment, company cannot be proceeded against, for example, without obtaining sanction of a court of law or other authority, then the trial as against the other accused may be proceeded against if ingredients of the offence are otherwise fulfilled. In such an event, it would not be a case where company had not been made an accused but would be one where company cannot be proceeded against due to existence of a legal bar. Thus, there is a distinction between cases where a company had not been made an accused and the one where despite making it an accused, it cannot be proceeded against because of a legal bar.
To answer your second question, let me first refer to Section 22-A of the UAP Act:
“22-A. Offences by companies.—(1) Where an offence under this Act has been committed by a company, every person (including promoters of the company) who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person (including promoters) liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised reasonable care to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any promoter, director, manager, secretary or other officer of the company, such promoter, director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purpose of this section,—
(a) “company” means any body corporate and includes a firm or other association of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.”
Thus, it can be seen that there are two categories of other persons who can be prosecuted along with the company for the offence committed by a company.
The first category covers the person, “was in charge of, and was responsible to, the company for the conduct of the business of the company”. For this clause, it may be necessary to state that such person was responsible for conduct of the business of the company.
The second category [under sub-section (2)] covers a person for whom it is proved that “the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any promoter, director, manager, secretary or other officer of the company”.
So, the answer to your second question will depend on the detailed facts and circumstances of your case. You may consult some local lawyer of your area and show him the documents to get an accurate opinion on this issue, because it may not be possible to answer the question in the absence of having gone through detailed facts/documents of the case.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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