The Bombay High Court recently quashed the prosecution and a 2009 summons issued by a Pune court against former CEO of ICICI Bank Chanda Kochhar and four senior bank officials in a case alleging octroi avoidance on imported gold coins. However, the ruling does not affect the case against the bank itself. The Court, led by Justice Neela Gokhale, examined a complaint filed by the local municipal corporation, which alleged that between April 2006 and August 2009, gold bullion and coins were brought into Pune by the bank without paying requisite octroi/duty. The municipal authorities calculated dues of around ₹1.27 crore, issued notices, and obtained a magistrate’s summons against the officials.
In quashing the prosecution, the Court noted that the complaint did not disclose any specific act linking the individual officials to the alleged wrongdoing — no material showed how any of them personally had managed or directed the octroi-related offence. The municipal law under which the complaint was filed (specifically the provision invoked) requires three basic ingredients for liability: (i) goods or items liable to octroi must be imported into city limits, (ii) payment of toll/octroi must not be made, and (iii) the non-payment must be with an intention to defraud the municipality. The Court observed that while the bank may be accused of octroi avoidance, those elements were not alleged as personal acts by the individuals.
The Court reiterated settled law that where a company is accused, its directors, officers or managers can be prosecuted personally only if the complaint ascribes specific incriminating acts to them, showing their personal culpability. In the present complaint, such attribution was entirely absent; the pleading was vague and did not state any act done by the individuals to evade octroi on imported gold. As a result, the Court held that continued prosecution of those officials would be legally impermissible.
Accordingly, the Court quashed the prosecution and summons against the former CEO and other senior officials, thereby clearing them of personal liability under the octroi-avoidance complaint. The proceedings against the bank entity alone may continue, but the individual officials cannot be prosecuted in absence of any averred personal wrongdoing.
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