Assignment 2

Process to delete name of Chairman/Directors from consumer litigation process
When a lawsuit is filed against a company like Airtel and includes high-ranking officials
(such as the General Manager or CEO) without direct allegations against them, these officials
can request their removal from the case through a legal process known as an Application for
Deletion of Party. This application is based on legal principles established in Indian law,
particularly the doctrines of vicarious liability and procedural rules under the Civil Procedure
Code (CPC), which together support that officers should not be held personally liable unless
they are directly involved in alleged misconduct.
The first step involves the officers or their legal representatives filing an Application for
Deletion of Party under Order 1 Rule 10(2) of the CPC, 1908. This rule allows the court to
remove any party that has been improperly joined in the suit, particularly when their
involvement is unnecessary for deciding the case’s core issues. Courts generally scrutinize
such applications, requiring that the applicant prove no direct involvement in the alleged
wrong. For instance, in the case of HDFC Bank Ltd. v. Amit Kumar Das (2020), the court
ruled in favor of removing specific officials who were added solely based on their job titles,
stating that mere designation does not warrant personal liability.
One of the main legal grounds for these applications is the Doctrine of Vicarious Liability,
which states that companies, rather than their officers, bear liability for corporate actions, as
emphasized in the Companies Act, 2013 and cases such as State Bank of India v. Bijoy
Kumar Mishra (2014). High-ranking officials cannot be made personally liable for a
company’s actions unless they actively participated in the misconduct or malicious intent can
be proven. The Supreme Court has upheld this principle in landmark judgments like Sunil
Bharti Mittal v. CBI (2015), which confirmed that unless direct involvement or intent is
demonstrated, senior executives should not be held accountable for corporate offenses in a
personal capacity.
Supporting the application, the officers may submit an affidavit detailing their specific roles,
clarifying that their involvement was limited to administrative or supervisory duties without
any personal or malicious intent. This affidavit reinforces that naming them in the case was
improper, as their actions were not personally connected to the issue at hand.
Once the application and affidavit are filed, the court examines whether these officers’ roles
directly contributed to the alleged offense. If the court is convinced that the officials were
named without legitimate grounds, it may issue an order to delete their names from the case.
This decision aligns with rulings such as Thermax Ltd. & Ors. v. K.M. Johny & Ors. (2011),
where the Supreme Court noted that mere designation does not justify liability, requiring
personal involvement for individuals to be held accountable in such cases.
HDFC Bank Ltd. v. Amit Kumar Das (2020): Search in SCC Online or Manupatra for rulings
on personal liability and improper party inclusion in cases involving senior corporate
officials.
State Bank of India v. Bijoy Kumar Mishra (2014): This case discusses vicarious liability and
is available on SCC Online or other legal databases.
Sunil Bharti Mittal v. CBI (2015): Available on major legal research platforms, this Supreme
Court case addresses personal culpability requirements for company executives.
Thermax Ltd. & Ors. v. K.M. Johny & Ors. (2011): This Supreme Court case clarifies the
requirement for personal involvement when establishing liability for senior officials.
Civil Procedure Code (CPC), 1908 - Order 1 Rule 10(2): Refer to any legal database for
access to the CPC, as well as commentaries that discuss procedures for party deletion.
Principle of Vicarious Liability and Corporate Liability

Vicarious liability is a legal doctrine in corporate law that assigns liability for wrongful acts
not directly to individuals in management, but to the corporation itself, unless specific
personal misconduct is proven. The principle holds that company executives are not
personally liable unless their actions are willful or malicious. The concept is supported under
various sections of the Companies Act, 2013, especially Sections 2(60), 27, and 85, which
stipulate conditions under which liability may be imposed on individuals for corporate
actions.
Key Cases:
Thermax Ltd. & Ors. v. K.M. Johny & Ors.* (2011): The Supreme Court held that liability
does not automatically extend to directors or officers merely due to their position in the
company. The court emphasized the need for a specific role or involvement in the wrongful
act for personal liability.
Sunil Bharti Mittal v. CBI* (2015): In this case, the Supreme Court established that personal
culpability must be clearly evident for company executives to be liable for corporate offenses.
The court emphasized that directors and officers are not personally liable for the
corporation’s actions without substantial proof of their direct involvement or intent.
Procedural Grounds for Removal Under Civil Procedure Code (CPC)

Order 1 Rule 10(2) of the CPC, 1908: This provision enables a court to remove or add parties
in a suit based on necessity or relevance to the dispute. When an officer is included in a case
solely due to their position, an *Application for Deletion of Party* can be filed under this
rule. The application is evaluated based on whether the officer’s role is crucial to resolving
the case’s core issues. The Bombay High Court in *Ajay Shah & Others v. Bharat Petroleum
Corporation Ltd.* (2016) ruled that individuals who are not essential to the issue at hand
should be removed, thereby supporting the view that only necessary parties should be named.
- Process of Application for Deletion:

- Filing the Application: The officer's legal team files an application stating the reasons for
deletion, supported by affidavits that detail their lack of involvement.
- Hearing and Judicial Review: The court examines the officer’s alleged involvement,
reviewing whether their actions or decisions were directly related to the alleged misconduct.
- Judicial Order: If the court finds no basis for personal involvement, it issues an order to
delete the officer’s name from the case, allowing the proceedings to continue solely against
the corporation.
Interpretation of Personal Liability in Corporate Actions

- Under Indian corporate law, personal liability for company executives arises only if the
individual’s actions are proven to be separate from corporate interests and involve specific
wrongdoing. The Supreme Court in *Madhumilan Syntex Ltd. v. Union of India* (2007)
provided clarity on individual versus corporate liability, explaining that the burden of proof
lies with the plaintiff to show personal malfeasance.
- The Companies Act also reinforces this under Section 85, where individual liability is
limited unless the individual knowingly permitted or performed an act with malafide intent.
This is in line with international best practices, seen in cases like *Salomon v. A Salomon &
Co Ltd.* in UK law, which firmly established the corporate veil doctrine.
Supporting Affidavits and Evidence of Non-Involvement

- Affidavit Requirement: When an officer seeks to be removed from a case, they submit an
affidavit detailing the nature of their role in the company, asserting that their involvement is
administrative or supervisory and does not pertain to the alleged wrongdoing. This affidavit
includes descriptions of decision-making structures within the company, delegating
accountability to avoid personal liability.
- Affidavit Sample: The affidavit may state that the officer was not directly involved in the
specific transaction or issue cited in the lawsuit and clarify their role in maintaining
procedural and oversight functions.
Judicial Standards and Precedent on Deletion of Corporate Officers

- Judicial standards dictate that executives and high-ranking officials should only be named
if there is evidence of direct responsibility or personal conduct outside the scope of corporate
interests. The Delhi High Court’s ruling in *State Bank of India v. Bijoy Kumar Mishra*
(2014) reinforced that corporate officers are protected from personal liability unless directly
linked to alleged misconduct.
- Indian courts have also examined the principle of *lifting the corporate veil* in
exceptional cases, where the court disregards the separation between individual and corporate
identity. However, this doctrine is applied sparingly and only when there is evidence of fraud
or misuse of corporate structure.
Significant Commentary and Scholarly Analysis
- Legal commentators have noted that the distinction between corporate and personal
liability protects corporate governance and decision-making by ensuring that officers are not
unjustly dragged into litigation. This view aligns with international commentary, such as in
*Gower and Davies’ Principles of Modern Company Law*, where the authors argue that
unnecessary personal liability could deter qualified individuals from taking leadership roles
in companies.
- In Indian context, the textbook *Myneni’s Company Law* highlights the necessity for
courts to carefully consider personal involvement when assessing the liability of company
executives.
Practical Implications and Strategic Approach for Corporations
- Corporations often prepare in advance by structuring decision-making processes to
minimize personal liability for officers. Companies also maintain documentation clarifying
that executive involvement is primarily policy-based, with operational decisions delegated to
relevant departments.
- When an officer is improperly named in a suit, companies and their legal teams focus on
establishing that the officer’s actions fall under routine governance and do not entail specific
liability. This strategy was evident in cases like *S.K. Gupta & Anr. v. K.P. Jain & Anr.*
(2003), where the Supreme Court recognized the importance of protecting executives from
undue personal liability.
.
Criminal Cases
Discharge of Accused (Sections 227 and 239 of the CrPC) (Section 250 and 262 of the
Bnss)
Section 227 (Sessions Cases) and Section 239 (Warrant Cases) allow an accused to be
discharged when the court finds that there is no sufficient ground for proceeding against
them. This can indirectly apply to officials or individuals implicated without direct
allegations, leading to their names being formally cleared during pre-trial stages.
Quashing of FIR or Charge sheet (Section 482 of the CrPC) (Section 528 of the Bnss)
The High Court has the inherent power under Section 482 of the CrPC to quash an FIR or
charge sheet to prevent abuse of the process of law or to secure the ends of justice. If a
person’s name appears in a criminal proceeding without any direct allegation, they can file a
petition under this section to seek relief.
Withdrawal of Prosecution (Section 321 of the CrPC) (Section 360 of the Bnss)
The Public Prosecutor can withdraw from the prosecution with the consent of the court if it's
justified in the interests of justice. This could be relevant if an official’s involvement is
deemed unnecessary.
Revision Application (Section 397 of the CrPC) (Section 438 of the Bnss)
A revision petition can be filed with a higher court to challenge interlocutory orders, such as
an order that unnecessarily associates an individual with a case.
So when a lawsuit is filed against a company like Airtel and includes high-ranking officials
(such as the General Manager or CEO) without direct allegations against them, these officials
can request their removal from the case through a legal process.

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Process to delete name of Chairman/Directors from consumer litigation process

Principle of Vicarious Liability and Corporate Liability

Procedural Grounds for Removal Under Civil Procedure Code (CPC)

- Process of Application for Deletion:

Interpretation of Personal Liability in Corporate Actions

Supporting Affidavits and Evidence of Non-Involvement

Judicial Standards and Precedent on Deletion of Corporate Officers

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