Director liability under foreign exchange law can survive resignation where the complaint alleges responsibility at the relevant time.

A director's resignation before the expiry of the prescribed period for realisation of export proceeds did not, by itself, defeat liability under the Foreign Exchange Regulation Act, 1973, where the complaint specifically alleged that he was in charge of and responsible for the company's business at the relevant time. The statutory scheme treated expiry of the repatriation period as the outer limit and supported a rebuttable presumption of contravention, so the complaint disclosed a prima facie case against the petitioner at the threshold. On that basis, the High Court found no ground to invoke inherent jurisdiction under Section 482 CrPC, as the allegations were neither absurd nor inherently improbable and quashing was declined.

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Issues: (i) Whether a director who resigned before expiry of the prescribed period for realisation of export proceeds could still be proceeded against for contravention under the Foreign Exchange Regulation Act, 1973. (ii) Whether the complaint disclosed sufficient prima facie material to justify refusal of quashing under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether a director who resigned before expiry of the prescribed period for realisation of export proceeds could still be proceeded against for contravention under the Foreign Exchange Regulation Act, 1973.

Analysis: Liability under the Act depended on whether the person was in charge of and responsible for the conduct of the company's business at the time of the contravention. The statutory scheme of Section 18 treated the prescribed period for repatriation as the outer limit and created a rebuttable presumption of contravention once that period expired without payment. The Court found that the petitioner remained a director during the export period and until a date within the prescribed period, and the complaint contained specific averments regarding his role in the company's affairs. On that basis, his subsequent resignation did not by itself negate liability at the threshold.

Conclusion: The petitioner was not shown to be of the statutory sweep at the threshold, and the proceeding against him was maintainable.

Issue (ii): Whether the complaint disclosed sufficient prima facie material to justify refusal of quashing under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The Court applied the settled principle that quashing is not warranted where the complaint contains the basic averments required to fasten vicarious liability and the materials disclose a prima facie offence. It held that the allegations were not absurd or inherently improbable, and the petition did not furnish material sufficient to rebut the statutory presumption or displace the complaint at the initial stage. The Court therefore found no ground to exercise inherent jurisdiction to interdict the prosecution.

Conclusion: Quashing was declined and the revision was not maintainable on merits.

Final Conclusion: The criminal revision failed because the complaint disclosed a prima facie case and the petitioner's resignation did not defeat liability at the threshold under the foreign exchange law.

Ratio Decidendi: For offences by a company under the Foreign Exchange Regulation Act, 1973, a director may be proceeded against where the complaint specifically alleges that he was in charge of and responsible for the company's business at the relevant time, and the High Court should not quash the proceedings under its inherent jurisdiction when such allegations disclose a prima facie case.

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