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TMI Blog2023 (1) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner in WP.No.16355 of 2016 was holding the post of Assistant General Manager, Canara Bank Mid Corporate Branch, the petitioner in WP.No.16352 of 2015 was formerly, the Chairman of the Catholic Syrian Bank, the petitioner in WP.No.17520 of 2016, the Deputy General Manager, State Bank of Hyderabad and the petitioner in WP.No.17511 of 2016 is Assistant General Manager, United Bank of India. 2. R2 in all writ petitions is one Gangotri Textiles Ltd. (R2/assessee) that had availed of a scheme promulgated by the Government of India under the Foreign Trade Policy, the Export Promotion Capital Goods Scheme (Scheme/EPCG Scheme). The Scheme entitled a beneficiary to import capital goods and set up manufacturing facilities at concessional rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised various Banks, that is, the State Bank of India, Syndicate Bank, State Bank of Travancore, State Bank of Hyderabad, United Bank of India, Canara Bank, Corporation Bank, State Bank of Mysore and IDBI Bank Limited. 8. The State Bank of India was identified as the Monetary Institution and the other banks as above, were to be joint lenders in the CDR empowered group. The CDR Cell, Mumbai, under communication dated 06.01.2009 approved the restructuring proposal and consequently, a Master Restructuring Agreement had been executed on 26.03.2009 along with a Trust Retention Agreement in favour of the Monitoring Institution and joint lenders. 9. It is pursuant to this and in line with the procedure normally followed, that the present petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place in 2007 and the export obligation was to be satisfied within a period of eight years from the date of issue of the license. In this background the issue that arises for consideration is as to the liability of nominee/independent directors on the Board of the company, and is an issue that assumes some importance. 14. I thus outline briefly, the position assumed by a nominee director and the contiguous liabilities, both in the context of Companies Act, 1956 as well as the Companies Act, 2013. A director is defined under Section 2(13) of the 1956 Act as including 'any person occupying the position of director, by whatever name called'. 15.There are no specific provisions under the 1956 Act that deal with other kinds of directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope and detail, taking into account both permanent as well as independent/nominee directors and their roles in the conduct of business. A nominee director is defined under Explanation to Section 149(7) to mean a director nominated by any financial institution in pursuance of the law for the time being in force or under any agreement or by the Government or any other person who represents its interest. 20. Their liability in terms of Section 149(12) would only extend to acts of omission and commission of a company where such acts have been committed with the express knowledge or consent of the director in a meeting of the Board attended by him. 21. General circular issued by the MCA in March 2020 clarifies that no civil or criminal proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and focused mandate to oversee the financial working of the assessee, I believe that it would be improper, unjustified and unwarranted to expect them to have had any participation or involvement in compliance with the continuing export obligation. 26. It is perhaps for this reason that the respondents have also dropped the proceedings as against the present petitioners as is clear from a communication that has been addressed to the learned counsel for the respondents wherein at para 2, the officer states as follows: After the Appeal dismissed, this Office has issued revised Recovery Order dated starting from 21.10.2019 to other dates in the month of October and November 2019 in 45 files. This Recovery Order was issued to M/s. Gangotri Te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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