2008 (4) TMI 771 - HC - FEMA

Summary

Issues Involved:
1. Quashing of Criminal Complaint u/s 482 CrPC.
2. Prima facie case against the Petitioner for violation of Section 18(2) and 18(3) FERA.
3. Interpretation of Section 68 FERA.

Summary:

1. Quashing of Criminal Complaint u/s 482 CrPC:
The petition seeks the quashing of a criminal complaint titled Chief Enforcement Officer v. Ratan Exports and Industries and Ors. pending in the Court of the ACMM, Delhi, insofar as it concerns the Petitioner. The complaint was filed by the Enforcement Directorate u/s 56 FERA read with Sections 49(3) and 49(4) FEMA against the Company REIL and six others, with the Petitioner arrayed as Accused No. 4.

2. Prima facie case against the Petitioner for violation of Section 18(2) and 18(3) FERA:
The Petitioner argued that there is no material, documentary or otherwise, connecting him with the Company. He claimed he was not aware of the day-to-day business, was not in charge, and was not responsible for the affairs of the Company. The Petitioner also stated that he had never attended any Board Meeting and was not involved in the Company's business operations. The complaint was filed mechanically and in haste to meet the deadline for filing under the erstwhile FERA.

3. Interpretation of Section 68 FERA:
Section 68 FERA, similar to Section 141 of the NI Act, requires that the person sought to be arraigned as an accused must be in charge of and responsible for the conduct of the business of the company at the time of the commission of the offence. The complaint must contain specific averments to this effect. The Court referred to the Supreme Court's judgment in Neeta Bhalla I, which mandates that the complaint must state that the accused was in charge of and responsible for the conduct of the company's business at the time of the offence. The Court found that the complaint did not satisfy this requirement as far as the Petitioner was concerned.

Conclusion:
The petition is allowed, and the Petitioner is discharged from the complaint case. The complaint will continue against the other accused, excluding Rajan Bagaria, who has already been discharged. The Court emphasized the need for specific averments in the complaint to make out a prima facie case against a Director under Section 68 FERA. The petition is allowed with no orders as to costs, and the pending application is disposed of. A copy of the order will be sent to the court of the learned ACMM immediately.