2017 (2) TMI 656 - HC - FEMA

Court upholds complaint against petitioner under Foreign Exchange Regulation Act, 1973.

The court found sufficient evidence to maintain the complaint against the petitioner under Sections 8(1), 9(1)(a), and 9(1)(c) of the Foreign Exchange ... Complainant preferred a complaint under Sections 8(1), 9(1)(c) and 9(1)(a) of the Foreign Exchange Regulation Act, 1973, punishable under Section 56(1)(i) of Foreign Exchange Regulation Act, 1973 - Held that:- On perusal of the entire materials available on record, it is clearly revealed that so many incriminating materials available against the petitioner/A3. It is also revealed that the petitioner/A3 was informed by A2 about the business transaction of the A1 Company then and there. Further, the petitioner/A3 has acted as Chairperson for the Board of Directors of the Company meeting and passed resolution in the Board Meeting and A1 Company entered into contract with some other companies and the subsequent transactions were also informed by A2 to the petitioner/A3. Hence, it is very reasonable to presume that the petitioner/A3 was knowing about the in-charge and responsibility for the conduct of the business. Hence, the argument of the learned Senior counsel appearing for the petitioner/A3 that the petitioner is not in-charge of the company and she does not know about the contravention took place in the day today administration of the company is not acceptable, at the present stage, since so many materials were produced on the side of the Enforcement authorities. Further, the learned Senior counsel appearing for the petitioner has submitted that at the time of interrogation by the respondent authorities, the petitioner has denied all the questions and she has specifically stated that she had no knowledge about the business transactions of the company and the day today affairs of the Company. In this regard, this court is of the considered view that the petitioner/A3 denied all the questions raised by the enforcement officials and replied that she did not know about the company day today affairs and hence, this court has to look into the materials and evidences produced on the side of the Enforcement authorities. On verification of the materials available on record, it is presumed that the petitioner/A3 is responsible and liable for the contraventions done by the A1 Company and there are sufficient records and evidences produced on the side of the enforcement authority. Hence, this court is of the considered view that there are prima facie materials available to frame charges against the petitioner/A3 under Sections 8(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973 and the trial Judge has rightly come to the conclusion that prima facie materials are available against the petitioner and dismissed the discharge petition filed by the petitioner/A3. In view of the above circumstances, this court finds no infirmity or illegality in the order of the trial court, which do not call for any interference by this court. Issues Involved:1. Maintainability of the complaint against the petitioner under Sections 8(1), 9(1)(a), and 9(1)(c) of the Foreign Exchange Regulation Act, 1973.2. Applicability of vicarious liability under Section 68 of the Foreign Exchange Regulation Act, 1973.3. Evaluation of evidence and prima facie case against the petitioner for framing charges.4. Admissibility of evidence and statements recorded during the investigation.Issue-Wise Detailed Analysis:1. Maintainability of the Complaint:The petitioner contended that the complaint filed under Sections 8(1), 9(1)(a), and 9(1)(c) of the Foreign Exchange Regulation Act, 1973, was not maintainable against her. It was argued that there were no specific averments in the complaint indicating that the petitioner was in charge of or responsible for the day-to-day management of the company. The petitioner claimed she was only an ordinary Director and not involved in the company’s affairs. However, the court noted that the petitioner had acted as Chairperson in a Board meeting, signed relevant documents, and passed resolutions, indicating her involvement in the company’s operations. The court concluded that the complaint was maintainable against the petitioner.2. Applicability of Vicarious Liability under Section 68:The petitioner argued that Section 68 of the Act, which deals with vicarious liability, was not applicable to her as there were no averments in the complaint indicating her responsibility for the company’s conduct. The court referred to Section 68, which states that every person in charge of and responsible to the company for the conduct of its business shall be deemed guilty of contravention. The court found sufficient evidence indicating the petitioner’s involvement in the company’s decisions and transactions, thereby making her liable under Section 68.3. Evaluation of Evidence and Prima Facie Case:The petitioner sought discharge under Section 245(1) Cr.P.C., arguing that there was no evidence against her warranting a conviction. The court examined the evidence, including documents and statements, and found incriminating materials against the petitioner. It was noted that the petitioner had signed resolutions and was informed about the company’s transactions. The court held that there was a prima facie case against the petitioner, justifying the framing of charges. The court emphasized that at the stage of framing charges, the test is whether there is sufficient ground for presuming that the accused has committed an offense.4. Admissibility of Evidence and Statements:The petitioner challenged the admissibility of certain statements recorded during the investigation, arguing that they were inadmissible as the witnesses were not examined in court. The court referred to Sections 39, 71, and 72 of the Foreign Exchange Regulation Act, 1973, which provide for the examination of persons, burden of proof, and presumption as to documents. The court noted that the statements and documents were relevant and admissible under these provisions. The court also referred to precedents where it was held that objections regarding admissibility of evidence should be decided at the final stage of the judgment.Conclusion:The court concluded that there were sufficient materials and evidence against the petitioner to frame charges under Sections 8(1), 9(1)(a), and 9(1)(c) of the Foreign Exchange Regulation Act, 1973. The trial Judge’s order dismissing the discharge petition was upheld, and the criminal revision was dismissed. The court found no infirmity or illegality in the trial court’s order, confirming the presence of a prima facie case against the petitioner. Consequently, the connected Miscellaneous Petition was closed.