Central

Section 9 of The Lotteries (Regulation) Act, 1998

(1)Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was incharge 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 if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2)Notwithstanding anything contained in sub-section (1), where an 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 the offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this section,—
1. (a)"company" means any body corporate and includes a firm or other association of individuals; and
2. (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 and the person in charge are deemed guilty.
Every person who was in charge of, and responsible to, the company for conducting its business at the time of the offence is deemed guilty and liable to be punished.
An in-charge person is not liable to any punishment if they prove that the offence was committed without their knowledge, or that they exercised all due diligence (careful, active effort) to prevent it.
Any director, manager, secretary, or other officer of the company is also deemed guilty if the offence was committed with their consent, connivance (secret cooperation), or is due to their neglect.
A company includes any registered corporation, partnership firm, or other association of individuals, and a director of a partnership firm is a partner in that firm.

Practical examples

1On 10th August 2026, a registered company called Lucky Draws Private Limited is found selling unauthorized lottery tickets in Delhi. Under Section 9, the company itself and the managing director, Vikram Mehta, who was in charge of the daily business operations, are both charged and deemed guilty.

2Vikram Mehta proves in court that the illegal ticket sales were carried out secretly by a rogue IT manager, and that Vikram had established strict daily audits to prevent fraud. Because Vikram exercised all due diligence and had no knowledge of the crime, he is spared from personal punishment, though the company remains liable.

3A partnership firm called Fortune Associates is found running an illegal lottery scheme. Under the definition in Section 9, the firm is treated as a company, and the partners, including Anita Roy, who actively consented to the scheme, are prosecuted as directors.

FAQ

1. Who is held responsible if a company commits an offence under this Act?

Both the company itself and every person who was in charge of and responsible to the company for its business conduct at the time of the offence are deemed guilty.

2. How can a person in charge of a company avoid punishment under this Section?

They must prove in court that the offence was committed without their knowledge, or that they exercised all due diligence to prevent it.

3. Can a company director or manager who was not directly in charge of daily operations still be punished?

Yes, if it is proved that the offence was committed with their consent, connivance (secretly helping), or was due to any neglect on their part.

4. What does the term company mean under Section 9?

It means any body corporate (registered corporation) and includes a partnership firm or other association of individuals.

Test yourself

Q1.If a company commits an offence under this Act, who is deemed guilty of the offence along with the company?

Q2.What defense is available to an in-charge person of a company to avoid punishment under Section 9?

Q3.If a company's officer is not in charge, under what condition can they still be deemed guilty of an offence?

Q4.What is the definition of "company" for the purposes of Section 9?

Q5.In relation to a partnership firm, what does the term "director" mean under Section 9?

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