TMI Blog2008 (4) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner here was arrayed as Accused No. 4 in the complaint. 3. The complaint stated that by a letter dated 26th May, 1997 Reserve Bank of India (RBI) had informed the Enforcement Directorate that export proceeds to the tune of ₹ 22.95 crores were pending realization in the account of REIL. Earlier, for the purpose of investigation, a directive had been issued by the RBI to REIL on 19th September 1996 under Section 33 (2) FERA calling for the details of outstanding exports. By a letter dated 23rd October, 1996 REIL informed RBI that during the period 1992-96 the Directors of the REIL were Shri Ratan Lal Bagaria, Shri Bijoy Bagaria, Shri Ajay Bagaria, Shri Mohan Churiwala, Dr. S.Rangana and Smt. Vidya Bagaria. Summons under Section 40 FERA was issued to the REIL on 17th September 1997. Shri Palash Ganguly, Director of REIL appeared and made a statement on 17th October 1997 before the Enforcement Directorate. Shri Palash Ganguly informed that: Shri Ratan Bagaria is controlling all the operations and the day-to-day affairs of the company, the presently S/Shri Ratan Bagaria, Managing Director and S/Shri Bijoy Bagaria, N.K. Hara, S.N. Garg and Palash Ganguly (himself) are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 973 by the said company. h) Simply because it has been alleged by United Bank of India that I was one of the persons who was a guarantor in respect of loans and advances made by the said Bank to the said Company, the same does not make me a person responsible for the affairs of the Company. My being a guarantor is not a determining factor in any manner. 6. In reply to a show cause notice issued on 9th May, 2002 containing the very same allegations, a reply was sent by the petitioner on 3rd June, 2002 stating that he was one of the brothers of the Ratan Lal Bagaria who had floated REIL and at his request the Petitioner had lent his name for the Board of Directors. He stated that as far as I can remember I have never attended any Board Meeting of the said Company. I was never in charge nor responsible for the affairs of the said Company. It was further asserted as under: c) There is not an iota of material, documentary or otherwise which connects me with the Company. There is no letter or document which shows any transaction in which I had acted as a Director of Ratan Exports and Industries Ltd. d) I was not aware of the day to day business of the said Company, was not aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition filed by the Petitioner and on 9th October 2002 it was directed by this Court that the Petitioner could appear before the learned ACMM on date fixed and thereafter he would be admitted to bail. By order dated 22nd May 2003 the proceedings before the learned ACMM were stayed. That interim order has continued till date. 11. Mr. S.B. Upadhyay, the learned Senior Counsel, appearing for the Petitioner here submits that the complaint when read as a whole does not make out even a prima facie against the Petitioner for violation of Section 18(2) and 18(3) FERA read with Section 56 FERA thereof and Section 19(3) and 19(4) FEMA. Although the reply dated 20th May, 2002 was sent by the Petitioner on 24th May, 2002 and therefore would have been received by Respondent No. 2 by 30th May 2002, the present complaint filed on that date was drawn up mechanically and in haste to meet the deadline of 30th May, 2002 for filing a complaint under the erstwhile FERA. The complaint itself indicates that the Respondent No. 2 was aware that while Ratan Bagaria and Bijoy Bagaria were handling the business of the Company directly, the petitioner was only stated to be well conversant with its business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section 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 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. 14. The above section is more or less similar to the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aria, Shri Bijoy Bagaria and Shri Ajay Bagaria the first two were handling the business directly. Therefore, the case of Ajay Bagaria, even according to Respondent No. 2 was different from Rajan Bagaria and Bijoy Bagaria who were the two persons who were handling the business directly. The only other source relied upon by the Respondent No. 2 is the letter from United Bank of India, which has already been discussed hereinabove does not clearly indicate whether the Petitioner was a Director or a Guarantor. Further, merely being a Director without an averment that he was in charge of the affairs of the Company and responsible to it for the conduct of its business at the time of the commission of the offence does not satisfy the requirement of the law as explained by the Supreme Court in Neeta Bhalla I. Having embarked upon an enquiry, by sending an opportunity notice to which a reply was sent by the petitioner, the Respondent No. 2 was expected to ascertain some material which would satisfy the minimum requirement of the law vis-a-vis the petitioner for making out a prima facie case. 18. The decision in Girdhari Lal Gupta in relation to Section 23-C of the erstwhile FERA 1947 is i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
