Company Must Be Arraigned As Accused To Prosecute Its Employees As Vicariously Liable: Karnataka HC Quashes Case Over Purchase Of Stolen Jewellery

The Karnataka High Court has quashed criminal proceedings initiated against two employees of Attica Gold Pvt. Ltd, accused of purchasing stolen gold jewellery as the police failed to arraign the company as accused in the case. A single judge bench of Justice Hemant Chandangoudar allowed the petition filed by Honnegowda and Praveen H K and said “The charge sheet is laid against the petitioners-accused Nos. 2 and 4 alleging that the company in which they are working as an employees have purchased the stolen gold jewellery. In the absence of the company not being arraigned as a accused, the petitioners-accused Nos.2 and 4 cannot be held vicariously guilty of the same.” In coming to the finding the bench relied on the Supreme Court judgment in the case of R. Kalyani -vs- Janak C. Mehta and Others, reported in (2009) 1 SCC 516 wherein it is held that, "If a person, thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do so, as legal fiction is raised both against the company as well as the person responsible for the acts of the company". The FIR was lodged for the offence punishable under Sections 454, 380 and 413 of IPC alleging that the gold jewellery belonging to the complainant was stolen by the accused and sold the same to the Attica Gold Pvt. Ltd., in various branches. The police after investigation filed the chargesheet against the accused and the magistrate court having taken cognizance of the same on 16-09-2017, the accused approached the court seeking quashing of the proceedings. The prosecution had opposed the plea contending that the petitioners-accused Nos.2 and 4 who are the employees of the company having purchased the stolen jewellery have committed the aforesaid offences. Hence, the cognizance taken does not warrant any interference and sought for dismissal of the petition. The bench also noted that “Even otherwise, there is no material produced to substantiate the allegation that the petitioners-accused Nos.2 and 4 as employees of the said company fully knowing that the gold jewellery were stolen from the respondent No.2 have purchased the same.” Allowing the petition the court said “The continuation of the criminal proceeding against the petitioners accused Nos.2 and 4 will be an abuse of process of law.” Case Title: Honnegowda & ANR And State of Karnataka Case No: WRIT PETITION NO.1353/2018 Citation: 2023 LiveLaw (Kar) 20 Date of Order: 05-01-2023 Appearance: Advocate Prasanna Kumar P for petitioners HCGP VINAYAKA V.S for respondent.Click Here To Read/Download Order

Company Must Be Arraigned As Accused To Prosecute Its Employees As Vicariously Liable: Karnataka HC Quashes Case Over Purchase Of Stolen Jewellery

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