Where a person committing a contravention of this section or any other provisions of this Act is a company, every person who, at the time of the contravention was committed, was incharge of, and was responsible to the company, for the conduct of the business of the company as well as the company, its managing directors and other directors, shall be deemed to 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 of that he exercised all due diligence to prevent such contravention.

Explained:

Section 3A of the Telangana Gaming Act, 1974 deals with the criminal liability of companies involved in contraventions of the Act. The provision was inserted through the Telangana Gaming (Amendment) Act, 2017, strengthening the legal framework against gaming activities conducted through corporate or business entities.

What Does Section 3A Provide?

Where a company commits a contravention under the Telangana Gaming Act, Section 3A provides that the company and every person who was in charge of and responsible for the conduct of its business at the time of the offence may be proceeded against and punished.

The provision specifically covers the company’s managing directors and other directors, where they fall within the statutory requirements.

However, Section 3A also contains an important safeguard. A person can avoid liability by establishing that the contravention occurred without their knowledge or that they exercised all due diligence to prevent the contravention.

Purpose of Section 3A

The main objective is to prevent companies from being used as a shield for unlawful gaming activities. The provision allows responsibility to extend beyond the corporate entity to individuals who actually control or are responsible for the company’s operations.

This becomes particularly relevant where gaming activities involve physical gaming houses, betting operations or activities covered by the amended provisions relating to online gaming and wagering.