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Interpretation of Section 23C(1) and Section 23C(2) of the Foreign Exchange Regulation Act, 1947 in the context of vicarious liability for contraventions committed by a company. Analysis: The judgment pertains to a review petition filed by one of the appellants against their conviction under Criminal Appeals. The petitioner argued that Section 23C(2) of the Act, which deals with vicarious liability, was not considered during the original judgment. The Court reopened the case to examine this provision. The petitioner contended that neither Section 23C(1) nor Section 23C(2) applied to him based on the facts found by the Court. The defense raised was that the contravention occurred without his knowledge as he was abroad at the time. However, this defense was not presented in the lower courts initially. The Court noted that strict construction should be applied to Section 23C(1) due to its penal nature, imposing vicarious liability. The Court delved into the meaning of being "in-charge and responsible for the conduct of the affairs of a company." It was established that this term implies overall control of the day-to-day business operations. Various judicial interpretations from different High Courts were cited to support the notion that mere directorship or partnership does not automatically render one criminally liable unless specific involvement or neglect is proven. The evidence presented by the prosecution included statements from witnesses identifying the accused as being in charge of the firm. The appellant himself admitted to looking after the affairs of the firm, indicating his role in the business. Regarding the physical absence of the appellant during the offense, the Court held that being abroad did not absolve him of being in charge unless evidence showed he relinquished control. The Court balanced the vicarious punishment with the possibility of the offense occurring without the appellant's knowledge or due to neglect. Ultimately, the Court partially allowed the review petition, modifying the sentence to a fine of Rs. 2,000, considering the circumstances. The Court emphasized that the failure to highlight Section 23C(2) during arguments justified the review and subsequent modification of the original judgment.
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