Vicarious penalty liability requires objective consideration of evidence identifying who controlled company payments before fastening responsibility.

Liability under section 68(1) of the Foreign Exchange Regulation Act, 1973 could not be fastened without objectively considering the bank certificate and other material bearing on who operated the company's account and handled payments to foreign suppliers. That evidence was relevant to identifying the person responsible for the conduct of the company's affairs, and the record showed that the appellant's material had not been placed before the adjudicating authority. Because a fair and fresh finding on responsibility could not be made on the existing record, the penalty determination against the appellant and the other director was set aside and the matter remanded for fresh adjudication on the issue of the liable director.

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Issues: Whether the penalty imposed on the appellant under section 68(1) of the Foreign Exchange Regulation Act, 1973 could stand without consideration of the bank certificate and other material bearing on who operated the company's account and was responsible for the payment to foreign suppliers, and whether the matter should be remanded for fresh adjudication against both directors.

Analysis: The certificate issued by the bank was an important piece of evidence on the question who actually handled the company's payments to foreign suppliers, and it ought to have been considered while determining whether the appellant was the person responsible for the conduct of the company's affairs for the purpose of section 68(1). The record also indicated that the appellant's material was not brought on the adjudicating authority's file. In the circumstances, and because a fresh and objective finding on responsibility could not fairly be returned on the existing basis, the matter required reconsideration.

Conclusion: The impugned order, insofar as it fastened liability on the appellant and the other director, was set aside and the case was remanded for fresh adjudication on the question of identification of the director liable under section 68(1).

Final Conclusion: The penalty determination was not sustained and the dispute was sent back for a fresh finding after proper consideration of the relevant evidence.

Ratio Decidendi: Where liability under a vicarious penalty provision depends on identifying the person responsible for the company's affairs, material evidence directly bearing on operational control and payment handling must be objectively considered before fastening penalty.

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