Prima facie case at discharge stage allows prosecution of a director where record shows responsibility for company business.

At the discharge stage, the Court must only determine whether the record discloses a prima facie case and must not assess the evidence as if at trial. Applying that standard, the Madras HC found sufficient material showing that the petitioner was a director, acted as chairperson in a board meeting, signed relevant documents and resolutions, and was connected with the company's business transactions. Those facts were enough to attract the company liability principle under the Foreign Exchange Regulation Act, 1973, which permits prosecution of persons in charge of and responsible for the conduct of business. The refusal to discharge was therefore sustained and the challenge failed.

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Issues: Whether the petitioner was entitled to discharge in a prosecution under the Foreign Exchange Regulation Act, 1973 on the ground that no prima facie case was made out against her and that the complaint did not establish her liability as a director under the company liability provision.

Analysis: The materials on record showed that the petitioner was one of the directors, had acted as chairperson in the board meeting, signed relevant documents and resolutions, and was connected with the business transactions of the company. At the stage of discharge under the Code of Criminal Procedure, 1973, the Court was required only to see whether the evidence disclosed a prima facie case and not to weigh the evidence as if at trial. The company liability provision under the Foreign Exchange Regulation Act, 1973 permitted prosecution of persons who were in charge of and responsible for the conduct of business of the company, and the record contained sufficient incriminating material to attract that principle.

Conclusion: The discharge petition was rightly rejected and the revision challenging that order failed.

Final Conclusion: The order refusing discharge was sustained because the prosecution materials were sufficient to justify framing of charges against the petitioner at the preliminary stage.

Ratio Decidendi: At the stage of discharge or framing of charge, the Court must confine itself to whether the record discloses a prima facie case and may not assess the probative value of the evidence; where company-related materials indicate participation and responsibility, prosecution of the director under the company liability provision can proceed.

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