Vicarious liability for directors under FERA requires proof they controlled company business at the time, not mere designation.

Under FERA, vicarious liability for a director arises only if the authority establishes and records that, at the time of contravention, the director was in charge of and responsible for the company's business. A mere designation as director is insufficient to attract penalty under the deeming provision. Here, the material showed the appellant was a part-time, non-executive director with no day-to-day role, and no reasoned finding was made on the statutory conditions for liability. The penalty was therefore not sustainable and was set aside.

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Issues: Whether the appellant, a part-time non-executive director, could be held liable for contravention under FERA without a finding that he was in charge of and responsible for the conduct of the company's business at the relevant time.

Analysis: Section 68 of the Foreign Exchange Regulation Act, 1973 creates vicarious liability only when, at the time of the contravention, the person was in charge of and responsible to the company for the conduct of its business. The written representation filed by the appellant in the adjudication proceedings specifically asserted that he was only a part-time, non-executive director and had no role in day-to-day affairs, and the supporting affidavit of the company secretary was part of the record. The adjudicating authority and the appellate tribunal did not return any finding, on consideration of that material, that the appellant satisfied the statutory conditions for liability. A mere designation as director is insufficient to fasten penalty under a penal provision creating deeming liability.

Conclusion: The appellant could not be held liable in the absence of a reasoned finding that he was in charge of and responsible for the conduct of the company's business at the relevant time.

Final Conclusion: The penalty imposed under FERA could not be sustained and was set aside.

Ratio Decidendi: For fastening liability on a director under a penal provision creating vicarious liability, the authority must establish and record that the director was in charge of and responsible for the conduct of the company's business at the time of the contravention; liability cannot rest on designation alone.

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