TaxTMI 
TaxTMI 
2009 (2) TMI 929
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....;FEMA'). 2. The aforementioned complaint has been filed by the Enforcement Directorate against M/s. Harshita Limited (presently Harshita Organics Limited) [`Company'] and six others including the Petitioner who is described therein as a Director of the said company. The allegation against the Company was that it had failed to realize the export proceeds equivalent to Rs. 4,947.43 lakhs during the year 1997-98 and that the Company failed to furnish any permission of the Reserve Bank of India ('RBI') for extension of the time for realization of the export proceeds. Accordingly, it was alleged in the complaint that the Company had contravened Sections 18(2) and 18(3) FERA. 3. As regards the Petitioner the only allegation ....
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....lize the export proceeds was relatable to a later part of the accounting year 1997-98. Therefore factually also the Petitioner cannot be made liable for the offence committed by the company in terms of Section 18(2) and (3) read with Section 68 FERA. 5. Learned Counsel for the Respondent on the other hand submits that the fact that the Petitioner was a Director of the Company till 28th August 1997 is not in dispute. Since the failure to realize the export proceeds is relatable to the year 1997-98, a prima facie case is made out against the Petitioner. He further submits that the question whether the Petitioner was in fact in charge of the day-to-day affairs of the Company can be decided only at the trial. 6. As regards the first submi....
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..... 8. In Municipal Corporation of Delhi v. Ram Kishan Rohtagi the Supreme Court was examining whether the Respondent No. 1, who was the Manager of the Company in question, and Respondents 2 to 4 who were its Directors could be made liable for the offence committed by the company under Sections 7 and 16 of the Prevention of Food Adulteration Act. The averment in the complaint in the said case reads as follows: 5. That accused 3 is the Manager, of accused 2 and accused 4 to 7 are the Directors of accused 2 and as such they were incharge of and responsible for the conduct of business of accused 2 at the time of sampling. 9. In the context of the above averment, in para 15 of the judgment in Ram Kishan Rohtagi, the Supreme Court o....
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.... the Supreme Court in Municipal Corporation of Delhi v. Ram Kishan Rohtagi and later in SMS Pharmaceuticals v. Neeta Bhalla, the contention of the Petitioner merits acceptance. It is held that the complaint, when read as a whole, does not make out even a prima facie case against the Petitioner for the offence under Sections 18(2) and 18(3) FERA read with Section 68 thereof. 11. As regards the second submission, a reply filed by the Respondent does not dispute the fact that although the Petitioner may have been a Director at the time when the first exports were made on 31st May 1997 and 3rd June 1997, he was no longer a director on the dates when the realization of the export proceeds were done, i.e., 30th November 1997 and 3rd December 1....