The Allahabad High Court has quashed criminal proceedings initiated against Wipro founder and Chairperson Azim Premji in a labour law violation case arising out of operations at the company’s Lucknow office, holding that criminal prosecution cannot be sustained solely on the basis of a person’s corporate designation in the absence of specific allegations demonstrating direct involvement.
The single-judge Bench of Justice Zafeer Ahmad allowed a petition filed under Section 482 of the Code of Criminal Procedure (CrPC), 1973, seeking quashing of the summoning order dated February 8, 2017, and the consequential proceedings pending before the Chief Judicial Magistrate, Lucknow.
The High Court observed that vicarious criminal liability could not be mechanically imposed upon company directors, chairpersons or managerial personnel unless the governing statute specifically provided for such liability or the complaint discloses material showing active participation, consent, connivance or negligence attributable to the accused in commission of the alleged offence.
The complaint pertained to alleged violations of labour welfare and statutory compliance obligations at Wipro’s establishment in Lucknow. Premji contended before the Court that he had no role in the day-to-day administration or operational management of the concerned establishment and was neither supervising nor controlling the activities forming the subject matter of the complaint.
It was submitted on behalf of Premji that security services at the Lucknow office had been outsourced to G4S Secure Solutions India Private Limited under an agreement executed on March 18, 2015. According to the arrangement, G4S functioned as an independent contractor responsible for payment of wages, provident fund contributions, Employees’ State Insurance (ESI) obligations and compliance with applicable labour legislations in respect of its personnel deployed at the premises.
The petition further stated that Premji neither exercised managerial control over the contractor nor supervised its employees. It was also argued that he was based in Bengaluru and had no involvement in the routine functioning of the Lucknow establishment.
The High Court additionally noted the contention that no prior notice regarding the alleged violations had been served upon Premji or the concerned Wipro establishment and that he became aware of the criminal proceedings only after issuance of bailable warrants by the trial court.
Opposing the plea, the State Government argued that the complaint disclosed commission of cognizable offences under labour welfare statutes and that the summoning order had been validly passed by the Magistrate after taking cognizance.
However, upon examining the complaint and material on record, the High Court found that the prosecution against Premji had been initiated solely because of his position as Chairperson and Managing Director of Wipro, without any averment indicating his direct role in the alleged violations.
The Court also took note of the outsourcing agreement with G4S and observed that the contractor bore independent statutory responsibility for labour law compliance concerning its employees engaged at the premises.
Further, the High Court held that the summoning order passed by the Chief Judicial Magistrate was cryptic, non-speaking and passed in a mechanical manner without proper judicial application of mind. The Court observed that the Magistrate had failed to analyse the ingredients of the alleged offences, examine the evidentiary material on record or discuss the statutory provisions under which cognizance was taken.
Reiterating settled principles governing criminal prosecution of company officials, the Court observed that issuance of summons in criminal proceedings carries serious legal consequences and therefore requires careful judicial scrutiny before process is issued against an accused person.
The Bench also noted that a coordinate Bench of the High Court had earlier quashed similar proceedings arising out of identical facts in May 2024.
Holding that continuation of the criminal proceedings against Premji would amount to abuse of the process of law, the High Court allowed the petition and quashed the summoning order along with all consequential proceedings pending against him before the trial court.
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