SC orders ex-BPO chief’s trial

CEOs can face action for failing to ensure employees’ safety

NEW DELHI: If you are the chief executive of a company responsible for the safety and security of employees, you can be prosecuted for negligence if something untoward happens to the employee.

In a ruling that seeks to define the role of management in protecting employees from criminal offences, the Supreme Court on Thursday said that a CEO is liable to face action when there’s a complaint against him alleging violation of the law.

The court’s judgment came in a case involving National Association of Software and Services Companies (Nasscom) chief Som Mittal, who had sought the quashing of an FIR filed by the Karnataka government against him when he was managing director of the Hewlett Packard-owned BPO in Bangalore three years ago.

The immediate impact of the judgment is that Mittal can now be prosecuted for failing to provide safe transport to a woman night shift worker, Pratibha Srikanta Murthy. Pratibha was raped and killed in December 2005 allegedly by a company cab driver, who had made the victim believe that the BPO firm had authorised him to ferry her to work on the day of the crime. The cab driver, Shivakumar, has been arrested and is currently facing trial.

The Karnataka government alleged that the company hadn’t given proper security cover to her despite the state’s direction in this regard under the Karnataka Shops and Commercial Establishments Act. Among other things, the Act says that a company should provide transport and adequate security to women on nightshifts.

A bench comprising chief justice KG Balakrishnan, RV Raveendran and JM Panchal rejected the contention of Mittal’s counsel KK Venugopal that a director is exempt under section 3(h) of the Act, which seeks to protect employees and not “persons in management”.

Venugopal had claimed the state’s Act in its entirety was inapplicable to Mittal, who was the MD of the BPO. He also claimed that the question of violation of protection law did not arise as Mittal’s establishment was exempted from the Act by another order of the state.

However, a Karnataka government lawyer said that the objective of the protection law was to exclude persons in management from being considered as employees entitled to seek benefits and relief under the Act. It was not intended to exempt them from incurring liabilities under the Act. He also submitted that the state had indicated violations of the law and this was why the magistrate concerned had rightly taken cognisance of it.

However, the SC detailed the circumstances under which petitions for quashing certain FIRs could be entertained by the high courts. A plea for quashing could be entertained when the allegations made in the FIR, even if they are taken at face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused.

Secondly, high courts need not take cognisance when the undisputed allegations made in the FIR and the evidence in support of the same do not disclose the commission of any offence and make out a case against the accused.

Thirdly, if the allegations made are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion, here too high courts can quash the FIRs.

Fourthly, if the criminal proceeding is manifestly attended with male fide motives or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused here too courts can step in and quash the proceedings.