2008 (2) TMI 918 - HC - FEMA

Summary

Issues Involved:
1. Quashing of Criminal Complaint u/s 482 CrPC.
2. Allegation of contravention u/s 56 FERA.
3. Responsibility and liability of the Petitioner as a Director/Guarantor.
4. Adequacy of evidence and averments in the complaint.

Summary:

1. Quashing of Criminal Complaint u/s 482 CrPC:
This petition seeks the quashing of a criminal complaint titled Chief Enforcement Officer v. Ratan Exports & Industries and Ors. pending in the court of the learned Additional Chief Metropolitan Magistrate (ACMM), New Delhi, insofar as it concerns the Petitioner.

2. Allegation of contravention u/s 56 FERA:
The complaint was filed by the Enforcement Directorate u/s 56 of the Foreign Exchange Regulation Act, 1973 (FERA) read with Sections 49(3) and 49(4) of the Foreign Exchange Management Act, 1999 against the company M/s. Ratan Exports & Industries Limited (REIL) and six other persons, including the Petitioner.

3. Responsibility and liability of the Petitioner as a Director/Guarantor:
The complaint alleged that the Petitioner was a Director/Guarantor of REIL during the relevant period and responsible for the conduct of its day-to-day business. However, the Petitioner contended that he resigned as Director on 26th August 1990, and thus, was not liable for any alleged transactions during 1992-96. The Petitioner provided a copy of Form No. 32 filed with the Registrar of Companies to support his claim.

4. Adequacy of evidence and averments in the complaint:
The Enforcement Directorate based its case on a letter from the United Bank of India dated 12th April 2001, which listed the Petitioner as a "Director/Guarantor." The court noted that the complaint must contain specific averments that the individual directors were in charge of the day-to-day affairs of the company. The court found that the Enforcement Directorate did not have sufficient material to conclude that the Petitioner was responsible for the conduct of the business at the time of the alleged offence. The court emphasized that the Enforcement Directorate ignored the Petitioner's reply to the opportunity notice, which denied his liability.

Conclusion:
The court concluded that the complaint did not even prima facie make out a case against the Petitioner for violation of the provisions of FERA. Consequently, the Complaint Case titled Chief Enforcement Officer v. Ratan Exports & Industries and Ors. pending in the court of the learned ACMM, New Delhi, insofar as the Petitioner is concerned, and all proceedings consequent thereto, are hereby quashed. The petition is allowed with no orders as to costs.