2024 (8) TMI 663

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Joint Director, Directorate of Enforcement, New Delhi against the Order No. SDE (SKP) III/02/2008 dated 25.01.2008 passed by the Special Director of Enforcement, Enforcement Directorate, New Delhi whereby, no penalty was imposed on Smt. Tara Subba, Shri Chander Bahadur Subba, Shri Ajay Subba, and Smt. Jyoti Limboo, who were the Directors at M/s. Subba Microsystems Ltd., New Delhi. However, penalty was imposed on M/s. Subba Microsystems Ltd. and on its Chairman and a retired Director. 2. The Respondents were charged with Sub section (a) and (b) of Section 3 and Section 4 of Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3 of the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Reg....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e exercised all due diligence to prevent such contravention." 4. Ld. Counsel argued that the Adjudicatory Authority failed to appreciate documentary evidence available on record, which had sufficiently proved the involvement of the Respondents in the conduct of the business of the company. He prayed to allow the Revision Petition. 5. None appeared for the Respondents in spite of service of Notice and having been given more than one opportunity to do so. 6. We have carefully considered the rival submissions and the material on record. We observe that the liability under Section 42(1) depends on the role one plays in the affairs of the company, and not on mere designation. It cannot be that all Directors irrespective of their role an....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ffence under Section 68 of FERA, 1973 depends on the role one plays in the affairs of the company and not on mere designation or status. This Court in S.M.S. Pharmaceuticals Ltd. (supra) while elaborating the ambit and scope of Section 141 of Negotiable Instruments Act has already laid down above in paragraph 10 of the judgment as extracted above." 7. Ld. Adjudicating Authority has categorically observed in the impugned Order dated 25.01.2008 the following with respect to Shri S.R. Subba, Chairman of the Company: "All these facts revealed that he was the main person incharge of and was responsible to the company for the conduct of the business of the company as well as the company, as all the facts regarding investments & transa....