Jharkhand High Court Rules That The Chairman Of A Company Cannot Be Held Vicariously Liable Under The Minimum Wages Act If The Company Is Not Being Implicated In The Charge.

Posted On - 18 November, 2023 • By - King Stubb & Kasiva

[1]The Jharkhand High Court recently ruled that under the Minimum Wages Act, 1948, the Chairman of a company cannot be proceeded against without taking cognizance against the company itself when vicarious liability arises based on the allegations in a complaint. The ruling was made in a case involving a company, represented by its Chairman and Regional Head (ER), who were accused of failing to display the notice showing the extract of the Act and Rules in Hindi and English at the workplace.

The court observed that criminal jurisprudence envisages both direct and vicarious liability for an offence under the penal provision. It highlighted that the requirement of impleading the company arises when the accused is vicariously held liable for the acts of the company. Referring to a Supreme Court ruling[2], it emphasized the mandatory requirement of including the company as an accused when an individual is vicariously liable due to their position in the said company. Consequently, it concluded that the order to take cognizance of the case was not sustainable and set it aside.

[1] Cr. M. P. No. 1069 of 2018

[2] Criminal Appeal No. 838 of 2008