Offences by companies
(1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation—For the purposes of this section,—
(a) "company" means any body corporate and includes a firm or other association of individuals;
(b) "director", in relation to a firm, means a partner in the firm.
In plain English
What this section actually means
Section 16 lays out who in a company is personally liable when the company commits an EPA offence. Sub-section (1) catches the person 'in charge of and responsible to the company for the conduct of its business' — the CEO, MD, plant head or factory manager, depending on the case. Both the person and the company are deemed guilty.
The Proviso gives the individual a defence: prove that the offence was committed without your knowledge, or that you exercised 'all due diligence' to prevent it. This is the legal anchor for compliance programmes, environmental management systems, training records and internal audits — all documented diligence that the proviso protects.
Sub-section (2) reaches beyond the head of business. Where consent, connivance or neglect of a director, manager, secretary or other officer is proved, that individual is also personally liable — even if not 'in charge'.
The Explanation widens 'company' to any body corporate, firm or association of individuals; 'director' includes a partner in a firm. So LLPs and partnerships are squarely within Section 16.
Visual
See how it flows
Process
Section 16 liability tree
Once the company is found guilty, the cascade is automatic — defence is on the individual.
Company commits offence
Established under §15
Person 'in charge' deemed guilty
§16(1)
Proviso defence: no knowledge / due diligence
§16(1) Proviso
Director / manager: consent / connivance / neglect
§16(2)
Real life
What this looks like in real life
Independent director resists Section 16(1)
Setup. An effluent-discharge offence is committed by a listed company. Prosecution is filed against the entire board, including independent directors. The independent directors plead they had no role in the operational matters.
What the law does. Section 16(1) catches only those 'in charge of and responsible' — generally the MD and operational executives. Independent directors typically escape unless Section 16(2) (consent / connivance / neglect) is independently proved. The proviso of due diligence is also available.
Landmark cases
How the courts have read this
Sunil Bharti Mittal v. Central Bureau of Investigation
Supreme Court of India · 2015 · (2015) 4 SCC 609
Even though decided in a 2G context, the Court's reasoning on 'directing mind and will' is routinely applied to Section 16 EPA prosecutions — only the individual whose role is established attracts personal liability.
Frequently asked
Questions about Section 16
Open this section in the source PDF
Environment Protection Act, 1986.pdf
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