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of <h1>Court Orders Discharge Due to Lack of Involvement; No Evidence Against Ex-Director in FERA/FEMA Case.</h1> <h3>Satish Kumar Bhalla Versus Union of India (UOI) and Ors.</h3> The Ct directed the discharge of the petitioner from the complaint case under FERA and FEMA, emphasizing the necessity of actual involvement in a ... - Issues:Prayer for discharge in a complaint case under FERA and FEMA. Allegations against the company and the petitioner as a director. Interpretation of Section 68 FERA regarding liability of directors. Comparison with relevant case law. Dispute over petitioner's directorship during the relevant period. Decision on the petitioner's liability and discharge in the complaint case.The judgment concerns a petition seeking the discharge of the petitioner in a complaint case under the Foreign Exchange Regulation Act 1973 (FERA) and the Foreign Exchange Management Act 1999 (FEMA). The complaint was filed by the Enforcement Directorate against a company and the petitioner, described as a director, for failure to realize export proceeds and contravening FERA sections 18(2) and 18(3). The petitioner argued that the complaint did not establish a prima facie case against him and that he had resigned as a director before the alleged offense period. The respondent contended that the petitioner being a director during part of the relevant period was sufficient to establish a case.The key issue revolved around the interpretation of Section 68 FERA, which deems persons in charge of a company's business during a contravention to be guilty. The court referenced case law emphasizing that mere designation as a director is insufficient to establish liability and that actual involvement in the company's affairs at the time of the offense is crucial. Drawing parallels with precedent cases, the court analyzed the language of the complaint and concluded that it failed to establish the petitioner's liability under FERA sections 18(2) and 18(3) read with Section 68.Regarding the petitioner's directorship status, it was undisputed that he had resigned before the due date for realizing export proceeds, as evidenced by the filing with the Registrar of Companies. The court held that the deeming provision of Section 68 FERA was not applicable to the petitioner at the time of the alleged offense, further supporting the decision to discharge him from the complaint case.In the final ruling, the court directed the discharge of the petitioner from the complaint case, clarifying that the proceedings would continue against other accused parties. The judgment highlighted the importance of establishing actual involvement in a company's affairs for liability under FERA and upheld the petitioner's discharge based on the lack of prima facie evidence against him and his non-director status during the relevant offense period.
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