Section 50 of The Petroleum and Natural Gas Regulatory Board Act, 2006
- (1)Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was 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 provided in this Act, if he proves that the offence was committed without his knowledge or that he has 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 purpose of this section,--
- (a)"company" means any body corporate and includes a firm or other association of individuals; and
- (b)"director", in relation to a firm, means a partner in the firm.
Summary
- When a company commits an offence under this Act, the company itself and the person in charge of running its business at the time are both deemed guilty and can be punished.
- A person in charge can avoid punishment if they can prove they did not know about the offence or that they exercised all due diligence to stop it from happening.
- If an offence is proven to have happened with the consent, connivance, or neglect of any director, manager, secretary, or other officer, that specific individual is also deemed guilty.
- For the purposes of this rule, the word company includes firms and associations of individuals, and a director in a firm simply means a partner.
Practical examples
FAQ
1. Is a company's manager automatically sent to jail if the company breaks the law?
A manager is only deemed guilty if it is proven that the offence was committed with their consent or connivance, or due to their neglect.
2. How can a business leader defend themselves in court?
They can defend themselves by proving that the offence occurred without their knowledge, or that they took all necessary steps (due diligence) to prevent it.
3. Does this rule only apply to large registered corporations?
No, the definition of a company under this section includes firms and other associations of individuals.
Test yourself
Q1.Under Section 50 of The Petroleum and Natural Gas Regulatory Board Act, 2006, how does the law define a company for the purpose of assigning guilt for an offence?
Q2.Under Section 50 of The Petroleum and Natural Gas Regulatory Board Act, 2006, how can a person in charge of a company avoid punishment when the company commits an offence?
Q3.Under Section 50 of The Petroleum and Natural Gas Regulatory Board Act, 2006, when is a secretary of a company deemed guilty of an offence alongside the company?
Q4.Under Section 50 of The Petroleum and Natural Gas Regulatory Board Act, 2006, who is considered a director when applying these rules to a firm rather than a corporation?