2023 (6) TMI 1058 - HC - FEMA

Contravention of Section 8(1) and 9(1)(a) of FERA by the Company - petitioner and other individuals working for the Company were made vicariously liable for the alleged contravention by the Company by virtue of Section 68 of the Act - HELD THAT - As in view of order of the Special Director, ED, the court quashed the proceedings in respect of the company alone, (the sole petitioner before it). As considering the status of the present case, which has been dropped by the complainant in respect of all the accused persons, the proceedings in Case pending before the Learned Metropolitan Magistrate, 11th Court, Calcutta under Sections 56 and 68 of the Foreign Exchange Regulation Act, 1973 is liable to be also quashed in respect of all the petitioners therein including the petitioner in this revision. Revisional application is allowed.

Summary

Issues Involved:
The issues involved in the judgment are quashing of proceedings in Case No. C-2481/2002 pending before the Metropolitan Magistrate, 11th Court, Calcutta u/s 56 and 68 of the Foreign Exchange Regulation Act, 1973.

Issue 1: Alleged Contravention and Vicarious Liability
The complaint was filed for alleged contravention of Section 8(1) and 9(1)(a) of the Foreign Exchange Regulation Act, 1973 by a company, with individuals including the petitioner being made vicariously liable u/s 68 of the Act.

Judgment: The Enforcement Directorate dropped the show cause memorandum against the company and all individual noticees, including the petitioner, due to lack of evidence, leading to the quashing of the complaint against the company. The court held that continuation of proceedings against the petitioner would be an abuse of process of law.

Issue 2: Exoneration and Abuse of Process
The Enforcement Directorate exonerated the company and all individual noticees of contravention of the Act, leading to a judgment quashing the complaint against the company. However, the complaint against the petitioner continued, causing harassment and being deemed an abuse of process of law.

Judgment: The court found the continuation of the complaint against the petitioner oppressive and an abuse of process of the court, leading to the quashing of proceedings against all accused persons, including the petitioner.

Issue 3: Quashing of Proceedings
The Special Director, Enforcement Directorate dropped proceedings against the company and all individual noticees, including the petitioner, due to lack of evidence of contravention. Despite this, the complaint against the petitioner persisted, causing undue hardship.

Judgment: The court allowed the revisional application, quashing the proceedings in Case No. C-2481/2002 against all accused persons, including the petitioner, under Sections 56 and 68 of the Foreign Exchange Regulation Act, 1973.