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TMI Blog2024 (9) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the punishment. The Proviso, however, exclude those who submit that the contravention was without their knowledge and due diligence to prevent such contravention was taken. The case of the Appellant is that he was not Incharge for compliances rather it was Mohendar Ahuja. It was submitted that due safeguard was put in place for compliances and even comprehensive policy was prepared. It was to show that due diligence was exercised and otherwise contravention was not in his knowledge. We find the order of the Adjudicating Authority is silent on the issue rather the cryptic order has been passed in reference to the role of the Appellant and none of the argument has been dealt with while recording finding and imposing penalty. Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act, 1956, which was allowed by the Bombay High Court, vide its order dated 18.04.2015. As per the Scheme of agreement between two companies, the RMEL indemnified YMEPL against all libilities, action, proceedings and penalties. During the subsistence of the agreement periodic audits were conducted and imparted training to sub agents. 4. In the year 2018, the respondents initiated investigation based on certain specific information from undisclosed source and summoned Syed Nasir Ahmed, whose statement were recorded on 16.05.2018 and 12.11.2018. The allegation was that certain transactions were carried out in violation of various provisions of FEMA. The Appellant was also summoned and appeared where his statement was recorede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, made to set aside the impugned order. 7. The Ld. Counsel for the Respondent has contested the Appeal. It is submitted that only argument raised by the Appellant is in reference to Section 42 of FEMA. The Appellant was the Managing Director of the Company YouFirst Money Express Pvt. Ltd., thus was responsible for the conduct of the business of the Company as well to the Company. He was, in fact, in-charge of the Company being the Managing Director, thus he would fall u/s 42 of FEMA and, accordingly, finding contravention of the provisions of FEMA by the Appellant the penalty of rupees five lacs was imposed. There is no illegality in the order and otherwise Appellant has not challenged the contravention of FEMA rather, Appeal has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder 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 the 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 sub-section 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. Bare reading of Sectoin 42(1) makes it clear that every person who, at the time of contravention, was in-charge of, and responsible to the company for conduct of busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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