Corporate Accountability And Director Liability: Decoding Vicarious Liability In Indian Law

Introduction

In the interplay of corporate governance and law, the principle of vicarious liability is an often discussed and contentious subject. Based on the idea that individuals may be held accountable for the actions of another owing to a specific relationship or role, the principle of vicarious liability has far-reaching implications for directors and key managerial personnel of corporate enterprises.

Corporate entities, by their very nature, are incapable of independent action. As artificial legal persons, their intent and actions are attributed to their officers, directors, and key managerial personnel. However, the question that persists is whether directors can be held personally liable for the company's wrongdoings.