Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019
- (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 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 purpose of this section--
- (a)“company” means any body corporate and includes a firm or other association of individuals; and
- (b)“director” means a whole-time director in the company and in relation to a firm, means a partner in the firm.
Summary
- When a company breaks this law, both the company itself and every person who was in charge of and responsible for its business at that time are considered guilty.
- An in-charge person can avoid punishment if they prove that the offense was committed without their knowledge, or that they did their best (exercised all due diligence) to prevent it.
- If it is proven that any company officer, like a director, manager, secretary, or other officer, agreed to the offense, secretly allowed it, or neglected their duties, they will also be considered guilty and punished.
- Under this section, director refers to a whole-time director of a company, or a partner when referring to a partnership firm.
Practical examples
FAQ
1. Who can be held responsible when a company commits an offense under this Act?
Both the company itself and the person who was in charge of and responsible to the company for the conduct of its business at the time of the offense can be held responsible.
2. How can a person in charge of a company defend themselves if an offense is committed?
They will not be held liable if they can prove that the offense was committed without their knowledge, or that they exercised all due diligence (doing their best to prevent it).
3. Can a director or manager of a company be punished if they were not directly in charge of daily operations?
Yes, if it is proved that the offense was committed with their consent, connivance (secret approval), or is attributable to their neglect, they will be held guilty and punished.
4. What does the term director mean under Section 11 in relation to a partnership firm?
In relation to a partnership firm, director means a partner in that firm.
Test yourself
Q1.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, who is automatically deemed guilty when a company commits an offense, alongside the company itself?
Q2.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, how can a person in charge of the company's business avoid punishment?
Q3.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, which officers can be held guilty if an offense is committed with their consent, connivance, or neglect?
Q4.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, what does the term company include?
Q5.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, what does the term director mean in relation to a partnership firm?
Q6.Under Section 11 of The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, if a company is found to have violated Section 5 by storing electronic cigarettes in their warehouse, which is an offense punished under Section 8, how is the liability shared?