The Promotion and Regulation of Online Gaming Act 2025 (PROGA 2025) is expected to be a law in due course.
One specific clause that attracts attention is Section 11(3) proviso which states
“Provided that nothing in this sub-section shall hold an independent director or a non-executive director of a company who is not involved in the actual decision making, liable for such offence.”
In contrast, Section 85 of ITA 2000 states as follows:
Section 85: Offences by Companies.
(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made there under is a Company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention 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 punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made there under has been committed by a company and it is proved that the contravention has taken place 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 be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Explanation- For the purposes of this section
(i) “Company” means any Body Corporate and includes a Firm or other Association of individuals; and
(ii) “Director”, in relation to a firm, means a partner in the firm
The entire section 11 of the PROGA 2025 is otherwise similar to Section 85 of ITA 2000 and states as under:
11. (1) Where an offence has been committed by a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of that part of the business of the company as well as the company, shall be liable to be proceeded against and punished accordingly.
(2) Nothing contained in sub-section (1) shall render any such person liable to be proceeded against and punished accordingly under this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(3) 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 be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing in this sub-section shall hold an independent director or a non-executive director of a company who is not involved in the actual decision making, liable for such offence.
Explanation.—For the purposes of this section, the expressions—
(a) “company” means a body corporate, and includes—
(i) a firm; and
(ii) an association of persons or a body of individuals whether incorporated or not; and
(b) “director”, in relation to—
(i) a firm, means a partner in the firm;
(ii) any association of persons or
This is a welcome clarification and would now serve as a precedent in other laws also. However whether this is to be treated as a special statutory provision applicable only to this Act or considered as a principle will need a scrutiny of the Courts since the Supreme Court has earlier held that ” vicarious liability requires a statutory provision”. Sanjay Dutt & Ors. v. State of Haryana (2025).
Naavi
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