Section 40 of The Civil Liability for Nuclear Damage Act, 2010
- (1)Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
- (2)Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--For the purposes of this section,--
- (a)"company" means any body corporate and includes a firm or other association of individuals;
- (b)"director", in relation to a firm, means a partner in the firm.
Summary
- When a company commits an offence under this Act, both the company itself and the individuals in charge of its daily operations are considered guilty.
- The person directly in charge of running the company's business at the time of the offence can avoid punishment if they prove they did not know about the offence, or that they worked hard and did their best to prevent it.
- If it is proven that the offence occurred because of the consent, secret agreement (connivance), or neglect of any director, manager, secretary, or other officer, then those specific officers will also be held guilty and punished.
- Under this section, the term "company" includes corporations, partnership firms, and other associations of individuals.
- In the case of a partnership firm, the word "director" refers specifically to a partner in that firm.
Practical examples
FAQ
1. If a company commits an offence under the Act, who is held responsible?
Both the company itself and every person who was directly in charge of and responsible to the company for conducting its business when the offence happened are considered guilty.
2. How can a manager who was in charge of a company defend themselves against liability under Section 40?
The manager can escape punishment if they prove that the offence was committed without their knowledge, or that they exercised all due diligence (careful effort) to prevent it.
3. What happens if an offence is committed with the consent or neglect of a specific company officer?
If it is proven that the offence happened with the consent, connivance, or neglect of any director, manager, secretary, or other officer, that specific officer is also deemed guilty and punished.
4. What does the term "company" mean under Section 40?
Under this section, "company" is defined as any body corporate, and it also includes partnership firms or other associations of individuals.
5. Who is considered a "director" in a partnership firm under Section 40?
In a partnership firm, a "director" means any partner in that firm.
Test yourself
Q1.Under Section 40 of The Civil Liability for Nuclear Damage Act, 2010, what must a person who was directly in charge of a company prove to avoid punishment for an offence committed by that company?
Q2.Under Section 40 of The Civil Liability for Nuclear Damage Act, 2010, which of the following is explicitly included in the definition of a "company"?
Q3.Under Section 40 of The Civil Liability for Nuclear Damage Act, 2010, how is a "director" defined in relation to a partnership firm?
Q4.Under Section 40 of The Civil Liability for Nuclear Damage Act, 2010, which officers of a company can be held personally guilty if an offence is committed due to their neglect?