Directors of M/s Simplex Infrastructures Limited face trial for alleged breach of pollution control regulations under the Air (Prevention and Control of Pollution) Act, 1981.
In a significant ruling, the Allahabad High Court has upheld the summoning of directors of M/s Simplex Infrastructures Limited, reinforcing the principle of vicarious liability for company directors in environmental law violations. The judgment, delivered by Justice Brij Raj Singh, pertains to the alleged contravention of the Air (Prevention and Control of Pollution) Act, 1981, by the company during its operations related to the expansion of the Panki Thermal Power Station in Kanpur.
The case arose when the Uttar Pradesh Pollution Control Board filed a complaint against the company and its directors, alleging non-compliance with mandatory environmental clearances. The directors, Rajiv Mundhra and others, sought to quash the proceedings, arguing that they were not responsible for the company's day-to-day operations at the relevant time. They also contended that they had ceased to be directors long before the alleged violations occurred.
However, the court dismissed these applications, emphasizing that directors could be held vicariously liable under the Air Act if they were in charge and responsible for the company's business when the violations occurred. The court clarified that questions of fact regarding the directors' roles and responsibilities should be resolved during the trial, not during the quashing proceedings.
Justice Singh referred to several precedents, including the Supreme Court's rulings in cases like U.P. Pollution Control Board v. Dr. Bhupendra Kumar Modi and Sunita Palita v. Panchami Stone Quarry, to underscore the responsibility of company officials for environmental compliance. The court reiterated that at the summoning stage, a prima facie opinion based on the material presented is sufficient, and detailed examination of evidence should occur at trial.
The judgment sends a strong message about the accountability of corporate leaders for environmental compliance, highlighting the judiciary's role in enforcing environmental laws. With the rejection of the applications, the trial against the directors will proceed, where they will have the opportunity to present their defense regarding the allegations.
Bottom Line:
Directors of a company can be held vicariously liable under the Air (Prevention and Control of Pollution) Act, 1981 if they are responsible for the conduct of the company's business and fail to comply with the statutory provisions to prevent pollution. Questions of fact regarding their roles and responsibilities should be decided during trial and not at the stage of quashing proceedings.
Statutory provision(s): Air (Prevention and Control of Pollution) Act, 1981 Sections 21, 37, 40, Criminal Procedure Code, 1973 Section 482.
Rajiv Mundhra v. State of U.P., (Allahabad)(Lucknow) : Law Finder Doc id # 2883278
