TMI Blog2009 (11) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... Shailendra Swarup was incharge of the affairs of the company and responsible to it for the conduct of its business. This finding of the Adjudicating Authority was not faulted with by the Appellate Tribunal and rightly so. Appeal dismissed. - CRL. A. NO. 575 OF 2008 AND CRL. M.A. NO. 8045 OF 2008 - - - Dated:- 18-11-2009 - MS. INDERMEET KUAR, J. Rajiv Bansal, K.K. Patra and Shivendra Swarup for the Applicant. Ms. Rajdipa Behura and Ms. Deepti Sharma for the Respondent. JUDGMENT 1. M/s. Modi Xerox Limited was a company incorporated under the Indian Companies Act, 1956, in the year 1983; 17 remittances were made by this company through its banker Standard Chartered Bank wherein foreign exchange has been released ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs be dropped as the transactions are more than 15 years old and it would be inequitable to continue with these proceedings, being against the principles of natural justice. Para 8 of the reply had detailed the list of directors of the company at the relevant time which included the name of the present petitioner Shailendra Swarup at serial No. 9. It is relevant to state that there was no averment made in this reply that the present petitioner was not a full time director or was not incharge of the affairs of the company. 4. On 4-7-2003, Mukesh Dugar, Company Secretary, attested an affidavit stating therein that the company Modi Xerox Limited had since merged with Xerox Modi Corporation Limited. Mr. Shailendra Swarup who was the Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce before the Appellate Tribunal to draw the conclusion that at the time when the contravention was committed the petitioner was incharge of and was responsible to the company for the conduct of the business of the company; in the absence of this necessary ingredient not having been prima facie established either before the Adjudicating Authority or before the Appellate Tribunal; provisions of section 68(1) are not satisfied; no penalty could have been imposed upon the present petitioner. The Courts below had failed to appreciate that the petitioner is a practising Advocate, under section 48 of the Bar Council Rules, he is not permitted to have a whole-time interest in a company. There is also no explanation as to why pick and choose pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this argument propounded by the petitioner. 13. Learned counsel for the petitioner has placed reliance upon judgments of Supreme Court in SMS Pharmaceuticals Ltd. v. Neeta Bhalla [2005] 63 SCL 93 and N.K. Wahi v. Shekhar Singh AIR 2007 SC 1454 to substantiate his submission that to launch a prosecution against the alleged directors, there must be a specific allegation in the complaint as to the part played by them in the transaction; there should be a clear and an unambiguous allegation as to how the directors are incharge of and responsible for the conduct of the business of the company; in the absence of any specific averment the net result would be that the complaint would not be entertainable. It is further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the day-to-day affairs and the conduct of the business of the company in the complaint is a mis-understanding of the procedure; in adjudication proceedings there is no formal complaint. Attention has been drawn to the Adjudication Proceedings and Appeal Rules, 1974 which Rules have been formulated under the powers conferred under section 79 of the FERA. Rule 3(2) reads as follows : 3. Adjudication proceedings. (1)****** (2) Every notice under sub-rule (1) to any such person shall indicate the nature of offence alleged to have been committed by him. Further these rules which have a statutory force clearly indicate that it is only the nature of offence alleged to have been committed which has to be indicated in the notice and no m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No such plea had been taken in any of the earlier communications. 18. Judgment relied upon by the learned counsel for the petitioner lays down the undisputed proposition of law that in order to penalise a Director of a company under criminal law it must be specifically averred that the said Director was incharge of the affairs of the company and responsible to it for conduct of its business at the time of commission of the offence. This proposition is not in dispute and in fact is accepted by the learned counsel for the Department. There is also no dispute that the provisions of section 141 of Negotiable Instruments Act are more or less para materia the provisions of section 68 of the FERA; both of which deal with offences by a compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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