Criminal Liability Can't Be Imposed On Directors Solely Due To Designation: Chhattisgarh High Court Grants Bail In CSMCL Corruption Case

The Chhattisgarh High Court has granted regular bail to two Directors of a manpower supply company arraigned in the Chhattisgarh State Marketing Corporation Limited (CSMCL) corruption case, holding that criminal liability cannot be fastened upon a person merely because of his designation as a Director. The Court observed that, unless a statute specifically creates vicarious criminal liability or there is prima facie material demonstrating the Director's personal participation and specific overt acts, corporate designation alone cannot justify criminal prosecution or continued incarceration.Justice Amitendra Kishore Prasad was hearing a bail application filed by the Directors of Sumeet Facilities Private Limited, who were arrested in connection with an FIR registered by the Economic Offences Wing/Anti-Corruption Bureau under for the offences punishable under Section 120-B of the Indian Penal Code, 1860 and Sections 7(b) and 8 of the Prevention of Corruption Act, 1988. The case involved allegations of a large-scale conspiracy within CSMCL involving illegal commissions from manpower supply agencies, inflated billing, and diversion of public funds. The applicants contended that the prosecution had failed to produce any material showing that they had personally demanded or received illegal gratification or participated in the preparation of forged documents.The Court found that the applicants were not named in the FIR and had repeatedly appeared before the investigating agency pursuant to notices, furnished all documents sought, and cooperated throughout the investigation before being arrested. It further noted that no further custodial interrogation or recovery remained necessary.Relying upon various Supreme Court decisions, the Court reiterated that criminal liability is personal in nature and cannot be presumed solely from a person's position as a company Director. The Court further noted that the prosecution had not pointed to any independent material demonstrating that the applicants had personally demanded illegal gratification, received cash, prepared forged documents, or knowingly used forged documents as genuine.“Unless the prosecution discloses specific material attributing active participation or distinct overt acts to a Director, criminal liability cannot be presumed solely on account of the office held by him… the prosecution has not drawn the attention of this Court to any independent material demonstrating that either of the applicants personally demanded illegal gratification…,” the Court observed.The Court additionally considered that similarly placed co-accused had already been granted bail and found no distinguishing circumstance warranting a different approach. It observed that once the investigation is complete, evidence is predominantly documentary, and custodial interrogation is no longer required, continued pre-trial detention cannot be justified. Accordingly, the Court allowed the bail application and directed the release of the applicants on regular bail subject to conditions.Case Title: Amit Prabhakar Salunke & Anr. v. State of Chhattisgarh [MCRC No. 5181 of 2026]Click Here To Read/Download Order

Criminal Liability Can't Be Imposed On Directors Solely Due To Designation: Chhattisgarh High Court Grants Bail In CSMCL Corruption Case

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Criminal Liability Can't Be Imposed On Directors Solely Due To Designation: Chhattisgarh High Court Grants Bail In CSMCL Corruption Case

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