Vicarious liability for export-proceeds default upheld where company officer was in charge of business and penalty was not excessive.

Vicarious liability under section 68 of the Foreign Exchange Regulation Act, 1973 attaches to a company officer who is shown to have been in charge of and responsible for the company's business at the time of the contravention. On the record, the appellant was functioning as Executive Director of the International Trading Division and was entrusted with export-related work, while no reliable material rebutted the allegation that he controlled day-to-day business during the relevant period; the challenge to liability therefore failed. The penalty was also tested against the scale of the export-proceeds default and was found neither disproportionate nor unduly harsh, so no reduction was warranted. The appeal accordingly failed on both liability and quantum.

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Issues: (i) Whether the appellant, in his capacity as an officer of the company, could be held vicariously liable for the company's failure to realise and repatriate export proceeds under the Foreign Exchange Regulation Act, 1973. (ii) Whether the penalty imposed was excessive or harsh so as to call for interference.

Issue (i): Whether the appellant, in his capacity as an officer of the company, could be held vicariously liable for the company's failure to realise and repatriate export proceeds under the Foreign Exchange Regulation Act, 1973.

Analysis: Liability under section 68 of the Foreign Exchange Regulation Act, 1973 attaches to every person who, at the time of the contravention, was in charge of and responsible to the company for the conduct of its business. The record showed that the appellant had been functioning as Executive Director of the International Trading Division and was entrusted with export-related work. The show cause notice specifically alleged that he was in charge of and responsible for the company's day-to-day business during the relevant period. No reliable material was produced to dislodge that position, and the burden regarding facts within the appellant's special knowledge was not discharged. In these circumstances, the challenge to vicarious liability failed.

Conclusion: The finding of vicarious liability was upheld against the appellant.

Issue (ii): Whether the penalty imposed was excessive or harsh so as to call for interference.

Analysis: The amount of penalty was examined against the magnitude of the contravention and the value of the export proceeds involved. The penalty was found not to be disproportionate or unduly severe, and no ground was made out for reduction or interference.

Conclusion: The penalty was sustained and no interference was warranted.

Final Conclusion: The appeal failed on both liability and quantum, and the adjudication order was left undisturbed.

Ratio Decidendi: Where a company officer is shown by the record to have been in charge of and responsible for the relevant business at the time of contravention, vicarious liability under section 68 of the Foreign Exchange Regulation Act, 1973 follows unless the statutory defence of lack of knowledge or due diligence is established.

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