Non-Executive Directors Not Liable For Company’s Actions Unless Involved in Day-to Day Business: Bombay HC

The Bombay High Court (ā€˜HCā€™), in an application filed under Section 482 CrPC, 1973, which talks about inherent power of the HC, quashed criminal proceedings against applicants who were independent Non-Executive directors of a company.

Relying on Section 149(6) (9) and (12) of the Companies Act, 2013 the HC held that ā€œNon-executive director not being a promoter of or key managerial persons shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently.ā€