Firm dissolution does not bar prosecution for RBI Act contraventions committed while responsible persons were in charge.

Contravention of the RBI Act by a firm remains actionable against those who were in charge of and responsible for its business at the time of the offence, because dissolution of the firm does not extinguish prior liability or bar prosecution. Sections 45S, 58B(5A) and 58C are read together to prevent evasion of liability through dissolution or reconstitution, and the statutory phrase refers to the status of the person at the time of contravention, not the continuing existence of the firm. The order directing return of seized documents was set aside, and access to the records was restored.

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Issues: Whether prosecution and proceedings under the Reserve Bank of India Act, 1934 could continue against persons responsible for contraventions committed by firms after the firms had been dissolved and their assets and liabilities taken over by a company.

Analysis: Section 45S prohibits acceptance of deposits beyond the prescribed limits by an individual, firm or unincorporated association. Section 58B(5A) makes contravention of section 45S punishable, and section 58C provides that where the contravention is committed by a company, every person in charge of and responsible for its business at the time of contravention is also deemed guilty and liable to be proceeded against and punished. The dissolution of the firm does not erase the earlier contravention, nor does it defeat liability of the persons who were responsible when the offence was committed. The word used in section 45S denotes the class of person at the time of contravention and does not require the firm to remain in existence up to the stage of prosecution. The statutory scheme would otherwise permit evasion of liability by dissolution and reconstitution.

Conclusion: Prosecution against the persons responsible for the contravention remained legally possible notwithstanding dissolution of the firms, and the order directing return of the seized documents was set aside.

Final Conclusion: The revisional order in favour of the company was reversed, and the Magistrate's order permitting the Reserve Bank of India to scrutinise the seized records was restored.

Ratio Decidendi: A statutory contravention committed by a firm can still be pursued against those who were in charge of and responsible for the business at the time of contravention, and dissolution of the firm does not extinguish such liability or bar prosecution.

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