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TMI Blog2022 (12) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... are (i) the juristic person, i.e, one company namely, Mrs. Grapco Industries Limited, (ii) one Mr. T. Swaminatha, (iii) Mr. O.N Jalan and (iv) Mr. S. K. Sharma. Allegedly all the persons including the petitioner were assigned with the duty and responsibility of the management and day to day affairs of the said company being it's 'Directors' and senior official, at the relevant time of contravention of the mandatory provisions of law. 4. In the year 1996 the company affected export and shipment of goods valued at U.S. $ 2,91,200. Allegedly it had refrained from taking any action to secure the receipt of the export proceeds of the said amount, in respect of the said shipments. The export proceeds were not received in India within a period of six months from the date of shipment and the time period for receipt of such export proceeds has also not been extended by the Reserve Bank of India. Complainant alleged that such an act of the company and other accused persons including the present petitioner as the 'Director' of the company, of refraining from securing the full export value of the goods exported, from the country of final destination and thereby delaying the securing of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the post of directorship of the said accused no.1/company on and from 31st July, 1996. From 32 under the Company Act, 1956 was filed with the register of companies and the date of resignation as the director of the said company became effective on and from 2nd August, 1996. It has further been submitted that the allegations of non-receipt of export proceed related to export shipment in this case pertains to the months of April and May, 1996. Petitioner states that the statutory period of six months for remittance of the sell proceeds with respect to the said shipments would only expire in the months of October and November, 1996. He has said it to be evidently clear from the relevant documents, which are of the status of public documents, that after expiry of the six months period from the date of consignment, when "contravention" can be said to have set in, the petitioner was already disassociated and no way connected with the accused no.1/company and all his relations with the same were severed by that time. It is his submission that during the period when he was a 'Director' of the concerned company, allegation of any contravention to have been made in connection with the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned, that the petitioner has narrated before the trial court that he was a honorary 'Director' of the accused company and was no way connected with the affairs of the same even during the period he has been attached with the same. There the petitioner mentions that he resigned from the Board of the company on 31st July 1996 and the resignation was registered with the Registrar of Companies, Odisha, on 2nd August 1996. Mr. Ganguly says that after resigning there from, his client was disassociated with the company all together much before the time when the export proceeds were due to be collected. He says further, thus his implication of the petitioner is irrelevant, unnecessary and illegal too. Order of the trial court has dealt with this petition of the present petitioner and rejected the same on the grounds stated earlier in this judgment. Court's attention is drawn to the certified copy of the annual return of the company made up to 31 December 1996, wherein the status of the present petitioner is mentioned as the 'Director' of the company and the date of his seizing to be the same has also been mentioned to be 2nd August 1996, that is the date of registration of his resignation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra & Anr. Reported in (2014) 16 SCC 1 (ii) Anita Malhotra vs. Appael Export Promotion Council & Anr. Reported in (2012) 1 SCC 520. (iii) National Small Industries Corporation Limited vs. Harmeet Singh Paintal & Anr. reported in (2010) 3 SCC 330. The same shall be discussed at a later and appropriate stage. 16. On the submissions made as aforestated quashment of the proceedings against the present petitioner has been solicited. 17. Arguments made on behalf of the petitioner has been resisted with strong objections on behalf of the opposite party No.2. Pertinent to mention here that the factual aspects and relevant dates have not been objected to on behalf of the opposite party No.2. Mr. Chakrabarti, Ld. Advocate for the same, has emphasised regarding interpretation of the provisions of law, that of section 18(3) of the Act, in particular. According to him, last day of the prescribed six months period is only the outer limit, that is the cut off date, within which the company or any responsible person holding office of the same should not refrain from doing as necessary to repatriate the sale proceeds of exported goods. Therefore he disputes the argument of the petitioner as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management and affairs of a company. In practice it is the Board of Directors which looks after the management and protects the interests of all the stakeholders of the Company. A company's director's duties can generally include determining and implementing policies and making decisions, preparing and filing statutory documents with the company's office or other agencies, calling meetings including an annual meeting of shareholders, maintaining and keeping records, binding the company to contract with suppliers, lenders and other dealing with the company and also any other specific duties and responsibilities entrusted to him. 22. Therefore, a 'Director' would generally connote a person who may be in charge of and responsible to the company for conduct of its business. 23. In the case of N. Rangachari vs. Bharat Sanchar Nigam Limited reported in (2007) 5 SCC 108, the Hon'ble Supreme Court laid down following, (though in connection with a case under the Negotiable Instruments Act, 1881, however the provisions being pari materia with the provisions of this Act, can be followed in this case) : "20. In other words, the law laid down by this court is that for making a Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed manner. (b) If the Central Government is of opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette specified any goods, from among those goods to which a notification under clause (a) applies, and direct that in respect of the goods so specified, where an exporter makes a declaration under sub-clause (ii) of clause (a) of the value which he having regard to the prevailing market conditions expect to receive on the sale of such goods in the overseas market, he shall not, except with the permission of the Reserve Bank on an application made to the Reserve Bank by the exporter in this behalf, authorise or permit or allow or in any manner be a party to, the sale of such goods for a value less than that declared: Provided that no permission shall be refused by the Reserve Bank under this clause unless the exporter has been given a reasonable opportunity for making a representation in the matter: Provided further that where the exporter makes an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..........". 25. The avowed and evident object of Section 18 is to ensure that the nation does not lose foreign exchange which is very much essential for the economic survival of the nation. The exporter cannot be allowed to syphon away a part of the foreign exchange or to deprive the nation of the foreign exchange earned by the exports. Such is the phylosoply of Section 18. 26. The entire matter pertaining to payment for exported goods and the foreign exchange earnings arising there from has been dealt with in Section 18, which is a complete code in itself. Evidently the section has been very carefully designed. Every possible situation has been conceived and appropriate prophylactic measures to ensure the preservation of foreign exchange and preservation of siphoning off the foreign exchange which is very much essential to the economic life of the nation, have been embedded therein. 27. This provision has taken into its sweep, along with the juristic person, i.e, the company, every other person who might be responsible for conduct of business thereof to be booked for any offence/contravention. Accordingly a 'Director' of a company who is generally entrusted with such a respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se a person is a Director of a company, does not make him liable under the NI Act. Every person connected with the Company will not fall into the ambit of the provision." 31. The other case is of Anita Malhotra vs. Apparel Export Promotion Council & Anr., where the following finding were noted :- "22. This court has repeatedly held that in case of a Director, the complaint should specifically spell out how and in what manner the Director was in charge of or was responsible to the accused company for conduct of its business and mere bald statement that he or she was in charge of and was responsible to the company for conduct of its business is not sufficient." 32. Finally on behalf of the petitioner the case of National Small Industries Corporation Limited was referred to in which the following principles were derived :- "39. From the above discussion, the following principles emerge: (i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export value of the goods (whether ascertainable at the time of export or not), has been or will within the prescribed period be, paid in the prescribed manner. 35. The words finding place in section 18(1)(a) assume immense importance, particularly in the backdrop of the present case, in which the relevant time of 'commission of the offence' is in dispute. A conjoint reading of section 18(1) (c) and (a) would definitely propagate that the duty to get the sale proceeds of export to be repatriated does not merely arise after expiry of six months statutory period, but the last day of the sixth month from the date of export is only the outer limit and end of the timespan. Law requires the exporter to affairm in the declaration made under section 18(1)(a) that full export value has already been paid or will be paid within the prescribed period in the prescribed manner. The words 'within the prescribed period' appearing in section 18(1)(a) would definitely mean the prescribed period of six months, as provided under the statute. Therefore it is the mandate of law that all activities for repatriation of export value would be within the outer limit of sixty days time and in case this goal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in this case the petitioner imagined to take shelter under the proviso to Section 68 (1), projecting his lack of knowledge about the entire thing, after he left the company, but only untriumphantly so, having admitting his association with the company till months after export of the goods. As discussed earlier, extent of his involvement in the affairs of the accused company as a 'Director' thereof, has been specifically mentioned in the complaint dated 18.06.1998. Overall reading of the said complaint speaks of petitioner's involvement and makes out a case against him. At the moment there is no material available to construe that the petitioner rebuts the presumption of law so arises against him. Regard may have to the judgment of Gunmala Sales Private Ltd vs. Anu Mehta, reported in (2002) 1 SCC 234, the Hon'ble Apex Court has been pleased to hold as follows while delineating the scope and the power of High Court under section 482 of the Code:- "(a) Once a complaint is filed under section 138 read with section 141 of the Negotiable Instruments Act, the basic averment is made that the Director was in charge of and responsible for the conduct of business of the company at the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. 40. The other point raised by the petitioner is that though being designated or appointed in the accused company as a 'Director' , he was not entrusted with the management, affairs or policy of the same as part of his duty as a 'Director'. Company's records and more so the specific averments in the complaint show otherwise. This, at one end, prima facie constitutes a contravention/offence and make out a case against him and at the other, duly complies with the statutory provision and dictum of the Hon'ble Supreme Court in N. Rangachari's judgment (mentioned earlier). Hence this case shall not fall within the category of cases, where the power of this Court under section 482 Cr.P.C, 1973, may be exercised to prevent abuse of the process of the court or otherwise to secure the ends of justice. Contrarily, by following the ratio of the judgment of the Supreme Court, reported in (2018) 13 SCC 663 (N. Harihara Krishnan vs. J. Thomas), it can be stated that taking cognizance of an offence by the court is one of the initial steps in the whole process. Upon existence of prima facie material, the process of the court should not be hampered. 41. Therefore finding no merit in petitioner ..... 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