Bombay High Court Quashes Proceedings Against ICICI Bank Officials in Octroi Evasion Case

Court Finds Lack of Specific Allegations Against Bank Directors and Officers Under BPMC Act

In a significant judgment delivered on December 8, 2025, the Bombay High Court quashed the prosecution against several top officials of ICICI Bank Limited in an octroi evasion case filed by the Pune Municipal Corporation (PMC). The case, which accused the bank and its officers of evading octroi duties on imported gold bullions and coins, saw the court ruling in favor of the bank officials due to the absence of specific allegations attributing any direct role to them.

The judgment was delivered by Dr. Neela Gokhale, J., in the case titled "ICICI Bank Limited v. State of Maharashtra." The court examined the complaint lodged by PMC, which alleged that ICICI Bank had imported gold into the city limits without paying the requisite octroi duty, thereby contravening Sections 398 and 401 of the Bombay Provincial Municipal Corporation Act, 1949 (BPMC Act).

The court found that while the statutory provisions under the BPMC Act do establish vicarious liability for company directors and officers, such liability cannot be presumed based merely on their designation. Dr. Neela Gokhale emphasized that for such liability to be enforced, there must be specific allegations demonstrating the active involvement or role of the directors and officers in the alleged offense.

Citing precedents from the Supreme Court, including the cases of "Kamalkishor Shrigopal Taparia v. India Ener-Gen Pvt. Ltd." and "National Small Industries Corporation Ltd. v. Harmeet Singh Paintal," the court reiterated the necessity of specific averments to hold directors and officers vicariously liable for offenses committed by a company.

The court's decision to quash the proceedings against the bank's CEO, former Deputy Managing Director, a member of the legal department, and the branch manager was primarily based on the lack of specific allegations against them in the PMC's complaint. The judgment noted that the complaint did not ascribe any incriminating role or responsibility to these individuals, making the prosecution untenable.

While quashing the proceedings against the bank officials, the court clarified that the complaint against ICICI Bank as a corporate entity would continue. The court also left open all contentions to be argued before the Judicial Magistrate First Class (PMC), Pune.

This judgment underscores the importance of detailed and specific allegations in complaints involving corporate entities and their officers, reinforcing the principle that mere designation does not automatically translate to liability.

Bottom Line:

Vicarious liability under the BPMC Act requires specific allegations demonstrating a director's or officer's active involvement in the company's affairs; mere designation as a director or officer is not sufficient.

Statutory provision(s): Bombay Provincial Municipal Corporation Act, 1949 Sections 398, 401

ICICI Bank Limited v. State of Maharashtra, (Bombay) : Law Finder Doc Id # 2819473