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Proceedings under Section 8(2) and (4) of Foreign Exchange Regulation Act, 1973 against the petitioner and other directors of a company. Analysis: The petitioner and three other directors of a company were facing proceedings under Section 8(2) and (4) of the Foreign Exchange Regulation Act, 1973. The complaint filed by the Assistant Director, Enforcement Directorate alleged contraventions by the company and its directors. The petitioner challenged the complaint, arguing that it did not suggest any offense by the directors. The legality of prosecuting directors under the Act is governed by Section 68, which holds individuals in charge of the company responsible for contraventions. The complaint did not specifically allege that the petitioner or other directors were in charge of the company's affairs, a crucial element for liability under the Act. The petitioner's counsel contended that without an allegation of being in charge of the company, the directors cannot be held vicariously liable for the alleged offenses. The complaint only stated that the accused directors were managing the company's affairs, without explicitly stating they were in charge. The court analyzed the complaint's content and concluded that based on the wording of Paragraph 9, the directors, including the petitioner, could not be held liable for the offenses alleged against them. The court referred to previous judgments, including one by the Supreme Court, to interpret the meaning of "a person in charge and responsible for the conduct of the affairs of a company." It emphasized that this provision should be strictly construed and that the person must be in overall control of the company's day-to-day business to be held liable. The court also cited a Delhi High Court judgment, affirmed by the Supreme Court, which clarified the interpretation of a similar provision in another act. Based on these interpretations and the content of the complaint, the court held that the petitioner could not be accused of any offense and that the trial court had overlooked this crucial aspect. Consequently, the court allowed the petition, quashing the complaint and the summoning order concerning the directors of the company.
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