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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 ..... dia Limited through the accused no. 2 Abhishek Verma who was the Chairman of the Accused no.1 Company had contravened the provisions of Section for the alleged violations u/s. 8 (3), 8(4) and Section 68 of FERA for which a charge u/s. 56 of FERA is required to be framed." 3. The petitioner is also aggrieved of the Impugned Order dated 03.08.2007, whereby the following charge has been framed: "I, Sh. Ajay Kumar Kuhar, ACMM, New Delhi do hereby charge you accused M/s. Eassm India Ltd. (Now changed as AltaVista (India) Ltd.) through its Chairman Abhishek Verma and Abhishek Verman, Chairman of M/s. Essam India Ltd. ( now changed as altavista (India) ltd. as under:- That in the year 1997 by acquiring foreign exchange to the turne of US dollar 3,40,000/- you, a company person other than an authorized dealer or money changer for the particular purpose of importing computer system from M/s. European Capital Ltd. Sharja UAE and by 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion took place, charges against the said Company have been rightly framed through the petitioner. Analysis 9. I have considered the submissions made by the learned counsels for the parties. 10. Section 68 of the Act reads as under: "68. Offences by companies.- (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this subsection shall render any such person liable to punishment if he proves that the contravention took place without his knowledge 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 contrave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be guilty of the contravention...." Section 68(1) creates a legal fiction i.e. "shall be deemed to be guilty". The legal fiction triggers on fulfilment of conditions as contained in the section. The words "every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business" has to be given some meaning and purpose. The provision cannot be read to mean that whosoever was a Director of a company at the relevant time when contravention took place, shall be deemed to be guilty of the contravention. Had the legislature intended that all the Directors irrespective of their role and responsibilities shall be deemed to be guilty of contravention, the section could have been worded in different manner. When a person is proceeded with for committing an offence and is to 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 cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curring in Section 51 itself contemplate due communication of the allegations of contravention and unless allegations contains complete ingredients of offence within the meaning of Section 68, it cannot be said that a reasonable opportunity for making a representation in the matter has been given to the person, who is to be proceeded with. 48. The learned ASG is right in his submission that FERA, 1973 does not contemplate any complaint but the scheme of the Act indicate that a person, who is to be proceeded with has to be made aware of the necessary allegations, which may constitute an offence on his part. This Court in N. Rangachari [N. Rangachari v. BSNL, (2007) 5 SCC 108 : (2007) 2 SCC (Cri) 460] has observed that a person in the commercial world having a transaction with company is entitled to presume that the Directors of 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 procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before a Court is or is not such representative, the question shall be determined by the Court." (emphasis supplied) 16. A reading of the above would show that where the accused person is a company, it may appoint a representative for the purpose of the trial, and where such representative appears, any requirement of the CrPC that anything shall be done in the presence of the accused or shall be read or stated or explained to the accused, shall be construed as a requirement that that thing shall be done in the presence of the representative or read or stated or explained to such representative. Sub-Section (4) of 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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