Page 100 - ELT_15th August 2020_Vol 373_Part 4

434 EXCISE LAW TIMES [ Vol. 373

Offence by companies - Liability of director - Foreign Exchange - Re-
strictions on dealing - Non-executive director - Requirement of being in-charge
of and responsible for conduct of company’s business at relevant time - Not all
director irrespective of role and responsibilities can be held responsible for
contraventions by company - Liability to be proceeded with offence under Sec-
tion 68 of Foreign Exchange Regulation Act, 1973 depends on role one plays in
the affairs of the company and not on mere designation or status. - Section 68(1)
creates a legal fiction, i.e., “shall be deemed to be guilty”. The legal fiction triggers on
fulfilment of conditions as contained in the section. The words “every person who, at the
time of the contravention was committed, was in-charge of, and was responsible to, the
company for the conduct of business” has to be given some meaning and purpose. The
provision cannot be read to mean that whosoever was a Director of a company at the rele-
vant time when contravention took place shall be deemed to be guilty of the contraven-
tion. Had the legislature intended that all the Directors irrespective of their role and re-
sponsibilities shall be deemed to be guilty of contravention, the section could have been
worded in different manner. When a person is proceeded with for committing an offence
and is to be punished, necessary ingredients of the offence as required by Section 68 ibid
should be present. [paras 37, 38]
Offence by companies - Liability of director - Presumption that direc-
tor in-charge of company, a rebuttable presumption - Sections 8 and 68 of For-
eign Exchange Regulation Act, 1973. - A person in the commercial world having a
transaction with company is entitled to presume that the Directors of the company are
in-charge of the affairs of the company. The presumption of a person in the commercial
world is a rebuttable presumption and when adjudicating authority proceeds to impose a
penalty for a contravention of FERA, 1973, essential ingredients constituting an offence
under the FERA read with Section 68 ibid has to be communicated to the person proceed-
ed with to enable him to make effective representation in the matter. [para 40]
Appeal allowed
CASES CITED
N. Rangachari v. Bharat Sanchar Nigam Ltd. — (2007) 5 SCC 108
— Distinguished .......................................................................................................[Paras 32, 33, 34, 40]
N.K. Wahi v. Shekhar Singh — (2007) 9 SCC 481 — Referred ........................................................... [Para 31]
National Small Industries Corporation Limited v. Harmeet Singh Paintal
— (2010) 3 SCC 330 — Relied on ........................................................................................... [Paras 31, 35]
Pooja Ravinder Devidasani v. State of Maharashtra — (2014) 16 SCC 1 — Referred .................... [Para 31]
S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla — (2005) 8 SCC 89
— Relied on ..................................................................................................... [Paras 27, 29, 32, 33, 34, 38]
REPRESENTED BY : S/Shri Jagjit Singh Chhabra, AOR and Saksham
Maheshwari, Advocate, for the Appellant.
S/Shri K.M. Nataraj, ASG, B. Krishna Prasad, AOR,
Mrs. Shirin Khajuria and Ms. Ranjana
Narayan, Advocates, for the Respondent.
[Judgment per : Ashok Bhushan, J.]. - This appeal has been filed against
the judgment of Delhi High Court dated 18-11-2009 dismissing the Criminal Ap-
peal filed by the appellant by which appeal the judgment dated 26-3-2008 of the
Appellate Tribunal for Foreign Exchange in Appeal No. 622 of 2004 filed by the
appellant was challenged.
2. Brief facts of the case giving rise to this appeal are :

EXCISE LAW TIMES  15th August 2020  100