If a criminal case is filed against a corporate company, can the company’s managing director or CEO be personally held responsible for any such offence, saying “employer” as defined under statutory law is the senior most official and not the company per se. This question came up before a Bench of the Supreme Court on Wednesday.

In an appeal filed in the court, the Managing Director of a Bangalore-based IT solution provider had asked whether the corporate criminal liability lies on the company or its Managing

Director in the event of any violation of the exemption granted to establishments/ firms, for employing women during night shifts under the Karnataka Shops and Commercial Establishment Act, 1961.

The state Government initiated criminal prosecution against the MD in December 2005 after an unfortunate incident involving a woman employee of the company. Taking cognizance of the complaint, the Metropolitan Magistrate on December 30, 2005 made the senior official an accused for violation of Section 25 and other provisions of the Karnataka Shops and Commercial Establishment Act.

Section 25 of the Act, besides prohibiting women from being employed in night shifts, also allows the state Government to exempt certain industries from this requirement. But the exemption granted entails certain conditions to be met, like providing free transportation to and fro from work to home, having adequate number of security guards and so on.

On Wednesday, a Bench consisting Justices H K Sema and Markandeya Katju while agreeing that the question raised in the appeal must be settled, noted that there’s an absence of a specific and clear provision under the above Act defining the penal liability in case anybody contravenes exemption granted under it.

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