Director liability under foreign exchange law depends on being in charge of company business; later contrary plea was rejected.

A director may be held liable for contravention under the Foreign Exchange Regulation Act, 1958 only if he was in charge of and responsible for the company's business at the time of the offence. Here, the show-cause notice alleged that the petitioner was responsible for the company's conduct of business, and the company's initial reply identified him as a director without asserting that he was merely a part-time or non-executive director. That contrary plea appeared only later and was not shown to have been before the adjudicating authority or appellate tribunal. On the record considered by those authorities, the later denial was treated as an afterthought, and the penalty was upheld.

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Issues: Whether the petitioner, a director of the company, could be held liable for contravention under the Foreign Exchange Regulation Act, 1958 in the absence of an accepted plea that he was only a part-time or non-executive director and not in charge of the company's business.

Analysis: The show-cause notice specifically alleged that the petitioner was responsible for and in charge of the conduct of the company's business at the relevant time. The company's reply, given through its Company Secretary, identified the petitioner as one of the directors but did not state that he was merely a part-time director or outside the management of the company. That plea surfaced only in a later reply and was supported by an affidavit that was not shown to have been placed before the adjudicating authority or the appellate tribunal. The legal principle that liability of a director depends on being in charge of and responsible for the conduct of business at the time of the offence was accepted, but on the record before the authorities the petitioner's role as director was sufficiently admitted and the later contrary plea was treated as an afterthought.

Conclusion: The petitioner's challenge to the finding of liability failed; the order imposing penalty was upheld.

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