Page 117 - ELT_1_1st April 2020_Vol 372_Part

Law

2020 (372) E.L.T. 3 (S.C.)
IN THE SUPREME COURT OF INDIA
A.M. Khanwilkar and Dinesh Maheshwari, JJ.
SUBORNO BOSE
Versus
ENFORCEMENT DIRECTORATE
Civil Appeal No. 6267 of 2020, decided on 5-3-2020
Foreign Exchange Management Act, 1999 - Sections 16(6) and 42(1)
proviso - Non-utilisation of foreign exchange procured for completing import
procedure - Imported goods remained uncleared and Bill of Entry not submit-
ted - Contravention relating to year 2000 whereas Managing Director (MD) of
Company came in 2001 - Managing Director was alive to default, sought in-
dulgence of authorities for more time but did not take corrective steps
- HELD : Contravention of Section 10(6) ibid is continuing actionable offence -
Company and persons managing its affairs remain liable till corrective
measures were taken - Managing Director was alive to default and he could
not plead, in terms of proviso to Section 42(1) ibid, that contravention took
place without his knowledge or he exercised all due diligence to prevent con-
travention. - The contravention referred to in Section 10(6) of the FEMA Act is a con-
tinuing actionable offence. If so, the Company and the persons managing the affairs of the
Company remain liable to take corrective measures in right earnest. Considering the ad-
mitted fact that the appellant took over the management of the Company on 22-10-2001
and was fully alive to the default committed by the Company, yet failed to take corrective
steps in right earnest. Notably, being conscious of such contravention, the appellant had
sought indulgence of the authorities for more time. It must follow that the appellant can-
not now be heard to contend that no liability could be fastened on him individually. It is
not the case of the appellant that he is not an officer or a person in charge of and responsi-
ble to the Company for the conduct of the business of the Company, as well as, the Com-
pany on or after 22-10-2001. Considering the fact that the appellant admittedly became
aware of the contravention yet failed to take corrective measures until the action to im-
pose penalty for such contravention was initiated, he cannot be permitted to invoke the
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