Page 109 - ELT_15th August 2020_Vol 373_Part 4

2020 ] SHAILENDRA SWARUP v. DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE 443

Swarup and Rs. 5,00,000/- (Rupees Five Lakhs only) on M/s. Modi Xerox
Ltd. for contravention of Section 8(3) read with Section 8(4) and Section 68
of FERA, 1973, I also find the other directors were not joined the company
at relevant time when the transaction had taken place and were not respon-
sible for the conduct of the company, hence I drop the charges against
S/Sh. Laurence Lyndon Haddon, Stephen Lawrence Tierney, Bernard
Fournier, R.S. Lodha, R.P. Goel, Jan Williams Van Erde, Chaman Lal Turki
Dhar, Ramesh C. Vash, S.K. Jain, K.P. Narasimhan, Sunil Mitra, Sundershan
Lal, R.K. Mahajan, C.G. Parekh, Kari Kumar and Usha Ranjan Saha.”
25. There is no consideration of pleas of the appellant as has been ex-
tracted by the adjudicating officer himself as noted above specially in paragraph
10(1), 10(2) and 10(3) of the reply. The adjudicating officer has not even held that
the pleas taken by the appellant were untenable. The adjudicating officer, thus,
has imposed the penalty without returning a finding that it was the appellant
who was liable for contravention of the provisions of Section 8(3), 8(4) and Sec-
tion 68 of the FERA, 1973. The order of the adjudicating officer, thus, is unsus-
tainable on the above ground also.
26. The Appellate Tribunal has also not considered the above plea of
the appellant and by making general observation that management of the Com-
pany is to be handled by the Board of Directors, hence, the appellant being Direc-
tor is held guilty. No finding has been returned by the Appellate Tribunal that
the appellant was not a part-time, non-executive Director and was responsible
for the conduct of business of the Company at the relevant time.
27. We may also notice few judgments of this Court some of which
have also been referred to by the Learned Counsel for the parties. A three-Judge
Bench judgment in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Another, (2005) 8
SCC 89, had occasion to consider the provisions of Section 141 of the Negotiable
Instruments Act, 1981 which provisions are pari materia to Section 68 of the
FERA, 1973. Section 68 of the FERA, 1973 deals with Offences by Companies and
is to the following effect :
“68. Offences by companies. - (1) Where a person committing a contra-
vention of any of the provisions of this Act or of any rule, direction or order
made thereunder is a company, every person who, at the time of the con-
travention was committed, was in charge of, and was responsible to, the
company for the conduct of business of the company as well as the compa-
ny, 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 or that he exercised all due diligence to prevent
such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a con-
travention of any of the provisions of this Act or of any rule, direction or
order made thereunder 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 li-
able to be proceeded against and punished accordingly.
Explanation. — For the purposes of this section —
EXCISE LAW TIMES  15th August 2020  109