TMI Blog1977 (7) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner for the alleged contravention of Section 4(2) of the Foreign Exchange Regulation Act, 1947, by the Hindusthan Motors Ltd. Show cause notices were also issued to the said company and other directors and some officers of the said company on the said alleged grounds. The said notice alleged that the said company had entered into a contract with the United Commercial Bank Limited for the purchase of forward foreign exchange equivalent to ₹ 1.25 crores at the rate prevailing on the date of the said contract. If was, further, alleged that the said contract was entered into by the said company with the said Bank against its outstanding orders for import of raw materials, Bedford Trucks in CKD condition and components for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32,221-17-ld. were converted at the rate of eh. 1-5 29/32d = Re. 1 at the request in writing of the said company which writing was mostly signed by Shri %.. P. Sonthalia, an officer of the said Company and in a few cases by certain other officers of the said Company who signed for K. P. Sonthalia ; And Whereas the said conversion was made on the basis of the forward exchange contract No. 130/66 booked by the said Bank on 4-6-66 at the request of the said company contained in a letter dated 4-6-66 signed by Shri R. P. Jhunjhun-wala, Vice-President of the said Company ; It further alleged-- And Whereas the said R. P. Jhun-jjhunwala furnished on 4-6-66 to the said Bank a list of orders alleged to have been placed with M/s. Vauxhall Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . D. Jones, Shri K. P. Sonthalia, the said notice was issued to the other directors as well the petitioner on the ground that they were the directors of the company. In case of offences by companies, the vicarious liability of the officers and directors of a company for offences committed under the Foreign Exchange Regulation Act, 1947, arise Under Section 23-C of the said Act, which is to the following effect. 23-C. (1) If the person committing a contravention 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the director simpliciter as such can not be said to be the person who was in charge of and was responsible to the company for the conduct of its business. The Supreme Court came to that conclusion having regard to the provisions of the Act, specially in view of Sub-section (2) of Section 23-C of the Act. Having regard to the averments made in this case, which I have set out hereinbefore, and in view of the said decision of the Supreme Court, it must be held that the petitioner as such, on the allegations made in the show cause notice, cannot be proceeded against by the impugned notice. It was, however, contended by the learned advocate on behalf of the respondent that the aforesaid decision of the Supreme Court was in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy available, or provided for under the law. The above view seems to be in consonance with the view of this Court in the case of Monindra Mohan Sarkar v. Income-tax Officer, Project Circle, North Bengal, Siliguri, 1977 Cal HC (Notes) 603 as well as with the decision taken by the learned single Judge of this Court in the case of Surja Mohan v. State of West Bengal 81 Cal WN S20 : 1977 Tax LR (NOG) 77 and the ratio of the Full Bench decision of the Gujarat High Court in the case of Ahmedabad Cotton Manufacturing Ltd. v. Union of India AIR 1977 Guj 113 (FB). 4. I ,am also unable to accept the position that the injury was not substantial, because to be exposed to an adjudication leading to quasi-criminal consequences without any materia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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