ARUN SOOD Vs. P K ROY

JUDGEMENT

(1.) This is a petition filed under Section 482 Cr.P.C. for quashing of the proceedings against the petitioner in respect of complaint bearing no. 357/93 under Section 57 of the Foreign Exchange Regulations Act, 1973 (hereinafter referred to as "the Act") and also for quashing of the orders passed by the Learned ACMM, dated 06.02.1997, by virtue of which the application of the petitioner under Section 245 (2) of the Cr.P.C., was dismissed. It has also been prayed that the order of the learned Additional Sessions Judge, dated 05.10.1999, upholding the said rejection order passed by the learned ACMM be also set aside. Briefly stated the facts of the case are that a complaint under Section 57 of the Act was filed by Mr.P.K.Roy, Assistant Director, Enforcement, against M/s Kay Films, Chanakya puri, New Delhi and its Managing Director, Kuldeep Singh Sood and the present petitioner. It was alleged that the adjudicating authority, vide order dated 20.02.1989, had imposed a penalty of Rs. 45, 00, 000/- on M/s Kay Films and Rs. 5, 00, 000/- on Kuldeep Singh Sood, for violation of Section 18(2) of the Act. So far as the present petitioner is concerned, no separate penalty was imposed upon him. The complaint was filed by the respondent no. 1/P.K. Roy, Assistant Enforcement Director, in the capacity of a public servant. No pre summoning evidence was recorded and notice was issued to all the three accused persons. The petitioner, on appearance, filed an application under Section 245 (2) of Cr.P.C. seeking discharge on the ground that so far as the petitioner is concerned, no penalty was imposed upon him by the adjudicating authority vide order dated 20.02.1989. The operative portion of the order dated 20.02.1989 read as under:

(2.) It was contended by the petitioner before the Trial Court that the proceedings against the present petitioner, under Section 56 of the Act, which were initiated by the respondent no. 1 were also quashed by Hon'ble Mr.Justice P.K.Bahri vide order dated 26.03.1990. It was contended that since no penalty has been imposed upon him and he has not been held as a Director of M/s. Kay Films, much less in-charge and responsible for the conduct of the business of the company, therefore, he could not be proceeded against by the respondent no. 1 by filing a complaint under Section 57 of the Act. This application of the petitioner was rejected by the learned ACMM vide order dated 06.02.1997, by holding that the petitioner is admittedly the Director of the company, M/s Kay Films and the Section 68 (1) of the Act clearly lays down that where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: provided that nothing contained in this sub-section render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised due diligence to prevent such contravention.

(3.) Reliance was also placed on Section 68(2) of the Act by the learned ACMM which states that notwithstanding what is contained in Section 68(1) if it is shown that the offence is committed with the consent or the connivance or is attributable to the neglect on the part of the Directors, Managers or Secretary or any other officer of the company then such a person shall also be deemed to be guilty of the contravention and can be proceeded against and punished. On the basis of reliance on Section 68 of the Act and by observing that admittedly the present petitioner being the Director of the company in question, he could not be discharged under Section 245 (2) of Cr.P.C.