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Issues:
- Interpretation of section 68 of the Foreign Exchange Regulation Act, 1973 regarding liability of directors in a company for contraventions. - Allegations in a complaint against the directors of a company under the Act. Analysis: The judgment involves the interpretation of section 68 of the Foreign Exchange Regulation Act, 1973, regarding the liability of directors in a company for contraventions. The petitioner and three other directors of a company were being proceeded against under sections 8(2) and 8(4) of the Act based on a complaint filed by the Assistant Director, Enforcement Directorate. The primary argument made by the petitioner's counsel was that the facts in the complaint did not suggest any offense committed by the directors. The relevant part of section 68 was highlighted, emphasizing that a person in charge and responsible for the conduct of the company's business can be deemed guilty of contraventions. The complaint alleged that the accused directors were managing the affairs of the company, but it did not specifically state that they were in charge and responsible for the conduct of the company's business. The court analyzed the contents of the complaint and noted that the allegation in paragraph 9 did not explicitly accuse the petitioner or the other directors of being in charge and responsible for the company's affairs. Referring to previous judgments, including one by the Supreme Court, the court emphasized that the section should be construed strictly. It was highlighted that a person "in charge" should be in overall control of the day-to-day business of the company. The court also referenced a similar interpretation by the Delhi High Court in a different context, which was affirmed by the Supreme Court. Based on the lack of specific allegations in the complaint, the court concluded that the petitioner and other directors could not be held liable for the offenses alleged against them. In conclusion, the court allowed the petition, quashing the complaint and the summoning order to the extent they related to the directors of the company. The court found that the trial court had failed to consider the crucial aspect that the directors were not specifically alleged to be in charge and responsible for the company's affairs, thus rendering the complaint unsustainable against them.
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