The roots of liability imposed under vicarious liability evolved from the law of Torts. It imposes civil liabilities only for any act or omission prohibited by law. The doctrine of liability for juristic personality is based on liability on the natural person in charge of and responsible for the conduct of business. Company laws do not make a distinction between various kinds of directors. In other words, the liability of Managing Director, Executive Director, Non-Executive Director and Independent Director is the same.
Section 179 of Companies Act, 2013 discuss the joint responsibility of the Board of directors and the exercise all powers, authorized and otherwise on behalf of the company. The Board of Director delegates these powers to MD, Executive Director, Non-Executive Director and ID. As a result of this broad-brush approach and to fasten the trial procedure and ascertainment of liability, the whole Board is drawn for any legal infractions.
The examples of such vicarious liability of directors can be seen in cases of cheque bouncing under Section 141 of the Negotiable Instruments Act, 1881 and of contraventions under Section 42 of Foreign Exchange Management Act, 1999. In these cases, the Enforcement Directorate does not differentiate Executive Director, the Hon’ble Supreme Court emphasized on words ‘in charge of’ and ‘responsible to’ as words which are material to impose liability vicariously. The legal test of liability is based on ‘responsible to’ principle. This may immune the Non-Executive Director or id who were not In Charge of the business. It becomes necessary for succeeding in imposing liability.  The liability arises from actual conduct of business and not merely on holding the designation. If a person merely holds ex-officio position the liability cannot be placed. He should have control and say in the transaction which constitutes the offence or contravention . And likewise a person who don’t hold any office or have any designation if is responsible or in charge to conduct business, the liability may be imposed. 
The pervasive control over affairs of the company arises liability.  The acts of directors in their professional capacity arise liability and company cannot be held liable for wrongs of directors in personal capacity.  The individual accused as director, MD, Executive Director, Non-Executive Director or Chairman must be proved with evidence his active role along with nexus to the criminal intent.  The Court has emphasized on liability of directors on factors like:
● Knowledge 
● Exercise of diligence 
● Consent 
● Connivance 
And these factors are material in determining liability.
Issue of summons
Though precedents suggest no liability on Non-Executive Director in cases where they aren’t expressly involved but practically courts are filled with fictitious cases and prosecutions under mere technical violations of the Shops & Establishments Act, Standards of Weights & Measures Act, Drugs & Cosmetics Act, Insecticides Act etc. The summons are issued in volumes to Non-Executive Directors. It brings us to an important part that summons issued under section 204 CrPC must be accompanied by application of proper judicial mind in forming sufficient ground for initiating and summoning a person for criminal proceedings. Further special laws like PMLA have reverse burden of proof  and stringent conditions for granting bail. 
Provisions for safe harbor
The law after so many fictitious cases provides for Section 149(12)  of the Act as a safe harbour for Non-Executive Directors. The provision limits the liability and provides for riders of Non-Executive Director’s active participation in order to qualify for liability. The MCA vide Circular No. 1/2020 dated March 02, 2020 directed the Registrar of Companies to protect Non-Executive Director against any legal proceedings unless sufficient evidence exists. The Standard Procedure be followed while initiating proceedings against Defaulting officers
Section 463 of Act, 2013 provide for liability when negligence, default, breach of duty, misfeasance or breach of trust exist and safeguards honest and reasonable person.
The existing framework fails to protect the liability of Non-Executive Directors and they end up into fabricated cases which result in Loss to reputation, mental stress and hardship which often discourages and disincentive professionals to accept a place in Board. The involvement of Non-Executive Directors in cases where they have no active role lead to overburdening of a clogged judicial system and prolonged litigation. There is an urgent need for amendment in laws for vicarious liability of Ned and a Non-obstante clause must be introduced to give overriding effect for protecting Non-Executive Director.
 Companies Act, 2013, § 179, No. 18, Acts of Parliament, 2013 (India).
 The Negotiable Instruments Act, 1881, §141, No. 26, Acts of Parliament, 1881 (India).
 Foreign Exchange Management Act, 1999, §42, No. 42, Acts of Parliament, 1999 (India).
 KK Ahuja v. V.K Arora (2009) 10 SCC 48.
 S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89; SEBI v. Gaurav Varshney, (2016) 14 SCC 430.
 Shailendra Swarup v. Enforcement Directorate, (2020) 221 CompCas 758 (SC).
 Sunil Bharti Mittal v. Central Bureau of Investigation (2015) 4 SCC 609.
 Iridium India Telecom Ltd. v. Motorola Inc., (2011) 1 SCC 74.
 Shiv Kumar Jatia v. State of NCT of Delhi AIR 2019 SC 4463.
 Usha Ananthasubramanian v. Union of India, (2020) 4 SCC 122.
 Chitra Sharma v. Union of India, W.P (Civil) No. 744 of 2017.
 Bikram Chatterji v. Union of India, W.P (Civil) No. 940 of 2017.
 State of Karnataka v. Pratap Chand, (1981) 2 SCC 335.
 The Code of Criminal Procedure, 1973, § 204, No. 2, Acts of Parliament, 1973 (India).
 The Prevention of Money-Laundering Act, 2002, §24, No. 15, Acts of Parliament, 2002 (India).
 The Prevention of Money-Laundering Act, 2002, §45, No. 15, Acts of Parliament, 2002 (India).
 Companies Act, 2013, § 149(12), No. 18, Acts of Parliament, 2013 (India).
 Companies Act, 2013, § 463, No. 18, Acts of Parliament, 2013 (India)..