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TMI Blog2024 (2) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 305 CrPC states that where the representative of a company does not appear, any such requirement as is referred to in sub-Section (3) of Section 305 CrPC shall not apply. In the present case, there is no authorization of the petitioner to represent the Company in the trial. In fact, the Company is in liquidation and a Provisional Liquidator already stands appointed for the Company. In terms of Section 457 of the Companies Act, 1956 (as was then applicable), it is only the Provisional Liquidator or person authorized by the Provisional Liquidator, who could represent the Company in the trial. The petitioner, therefore, cannot be said to be representing the Company. It is another thing to say that he would face the trial in his individual capacity as an accused, but another thing to say that he would also face the trial as a representative of the Company. Though the above issue was flagged before the learned Trial Court, as is reflected in the Orders the learned Trial Court proceeded to frame the charge against the Company taking the petitioner herein to be representing the Company. The same cannot, therefore, be sustained. Conclusion Directions - Trial Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y failing to import the said goods of value of representing the foreign exchange so acquired without any permission of RBI you M/s. Essam India Ltd. thereby committed offences under section 8(3) read with 8(4) of FERA 1973 punishable u/s 56 of FERA, and you Abhishek Verma Chairman of M/s. Essam India Ltd. Thereby committed offences under section 8(3) read with 8(4) of FERA 1973 and also read with section 68 of FERA 1973 punishable u/s 56 of FERA, 1973 within my cognizance. I hereby direct that you be tried of the above said offence by this court. (emphasis supplied) 4. The limited challenge of the petitioner to the Impugned Order and charge is that the Company, that is, M/s Esam India Limited, being in Liquidation and a Provisional Liquidator having been appointed for it, only the Provisional Liquidator can represent the Company in the proceedings pending before the learned ACMM and not the petitioner herein. Petitioner s Submissions 5. The learned senior counsel for the petitioner submits that the petitioner had resigned from the Company in the year 1993, that is, much before the alleged transaction that took place in 1997. 6. He submits that, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Explanation . For the purposes of this section.--- (i) company means any body corporate and includes a firm or other association of individuals: and (ii) director , in relation to a firm, means a partner in the firm. (emphasis supplied) 11. A reading of Sub-Section (1) of Section 68 of the Act would show that where the offence is alleged to have been committed by a Company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be punished, necessary ingredients of the offence as required by Section 68 should be present. 46. We may notice that Section 141 of the Negotiable Instruments Act, which was inserted in the Negotiable Instruments Act by amendment in the year 1988 contains the same conditions for a person to be proceeded with and punished for offence as contained in Section 68 of the FERA, 1973. Section 141(1) of the Negotiable Instruments Act uses the same expression every person, who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence . Section 68 of the FERA, 1973 as well as Section 141 of the Negotiable Instruments Act deals with the offences by the companies in the same manner. The ratio of the judgments of this Court on Section 141 of the Negotiable Instruments Act as noted above are also clearly relevant while interpreting Section 68 of the FERA Act. We, thus, hold that for proceeding against a Director of a company for contravention of provisions of FERA, 1973, the necessary ingredient for proceeding shall be that at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company are in charge of the affairs of the company. The presumption of a person in the commercial world is a rebuttable presumption and when adjudicating authority proceeds to impose a penalty for a contravention of FERA, 1973, essential ingredients constituting an offence under the FERA read with Section 68 has to be communicated to the person proceeded with to enable him to make effective representation in the matter. 14. As noted hereinabove, the petitioner at this stage, does not dispute the invocation of Section 68 of the Act against him. The learned senior counsel for the petitioner has submitted that the petitioner shall face the trial on the allegation on basis of which Section 68 of the Act has been invoked against the petitioner. This Court, therefore, need not detain itself on this issue. 15. The only issue before this Court is whether the charge against the Company can be framed through the petitioner. In this regard, Section 305 CrPC would be relevant and is reproduced hereinbelow: 305. Procedure when corporation or registered society is an accused. ( 1) In this section, corporation means an incorporated company or other body corporate, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. In the present case, there is no authorization of the petitioner to represent the Company in the trial. In fact, the Company is in liquidation and a Provisional Liquidator already stands appointed for the Company. 18. In terms of Section 457 of the Companies Act, 1956 (as was then applicable), it is only the Provisional Liquidator or person authorized by the Provisional Liquidator, who could represent the Company in the trial. The petitioner, therefore, cannot be said to be representing the Company. It is another thing to say that he would face the trial in his individual capacity as an accused, but another thing to say that he would also face the trial as a representative of the Company. 19. Though the above issue was flagged before the learned Trial Court, as is reflected in the Orders dated 08.04.2002, 13.05.2002 and 28.10.2002, the learned Trial Court proceeded to frame the charge against the Company taking the petitioner herein to be representing the Company. The same cannot, therefore, be sustained. Conclusion Directions 20. In my view, therefore, the learned Trial Court has clearly erred in framing the charge against the Company through the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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