Director liability under FERA survived quashing challenge because the complaint alleged responsibility for company business.

Criminal prosecution under the Foreign Exchange Regulation Act was not liable to be quashed merely because the departmental penalty had been set aside. The appellate authority had cancelled the penalty for want of a finding that the petitioner-director was in charge of, or responsible for, the company's business, or had consented to or connived in the contravention; mere directorship was insufficient to attract liability under Section 68. However, the complaint expressly alleged that the directors were responsible for the conduct of the company's business, which was enough to raise an issue for trial. As no conclusive factual finding rendered the prosecution untenable, quashing was refused.

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Issues: Whether the criminal proceeding under the Foreign Exchange Regulation Act was liable to be quashed on the ground that the appellate authority had set aside the departmental penalty against the petitioner.

Analysis: The setting aside of the departmental penalty was based on absence of a finding by the adjudicating officer that the petitioner, though a director, was in charge of and responsible for the company's business or had consented to, connived in, or neglected the contravention. Mere status as a director did not by itself attract liability under Section 68 of the Foreign Exchange Regulation Act. The complaint, however, contained an express averment that the directors were responsible for the conduct of the company's business, which was sufficient to raise a matter for trial. Unlike cases where a positive finding of fact rendered prosecution untenable, no such conclusive finding existed here.

Conclusion: The criminal proceeding was not liable to be quashed and the application was dismissed.

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