F. DADABHOY Vs. THE RESERVE BANK OF INDIA

JUDGEMENT

(1.) The respondent filed a private complaint in EOCC. No. 76/2000, on the file of the Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai, against the petitioner and 10 others for having committed the offences under Sections 45QA, 58B(4AAA) and 58C of the Reserve Bank of India Act, 1934 [in short "RBI Act"]. The petitioner is arrayed as fourth accused in the complaint and the petitioner has filed this petition to quash the complaint as against him. Mr. A. Ramesh, learned Senior Counsel appearing for the petitioner submitted that though the petitioner was one of the Director of the first accused Company, he resigned from the Company with effect from 13.08.1998, which is evident from the resignation letter given by the petitioner and also Form 32 filed by the Company, wherein it has been admitted that the petitioner ceased to be the Director from 08.09.1998. Therefore, in respect of the acts committed by the Company after the date of his resignation, the petitioner cannot be made liable. He submitted that in the complaint it has been stated that the first accused Company failed to repay the depositors, despite orders passed by the Company Law Board and therefore, the Directors are liable to be prosecuted.

(2.) The learned Senior Counsel for the petitioner submitted that out of 18 instances, the petitioner was the Director during the period in respect of 3 instances, namely 16.04.1998, 23.04.1998 and 23.06.1998 and in respect of other defaults, the petitioner cannot be found fault with. The learned Senior Counsel also submitted that having regard to Section 58C of the RBI Act, where a person committing a contravention or default referred to in Section 58-B is a company, every person who, at the time the contravention or default was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention or default and shall be liable to be proceeded against and punished accordingly and in para 10 of the complaint, the wordings of section 58-C of RBI Act was verbatim reproduced and by reproducing such words, a person cannot be made liable and unless it has been specifically stated in the complaint in what manner the Director has played role resulting in the violation of the orders passed by the Company Law Board or the provisions of the RBI Act and in the absence of providing such details, the petitioner cannot be vicariously held liable.

(3.) The learned Senior Counsel for the petitioner relied upon unreported judgments of the Hon'ble Supreme Court in Crl. A. Nos. 2604-2610 of 2014 arising out of SLP (Crl.) Nos. 9133-9139 of 2010 in [Pooja Ravinder Devidani v. State of Maharashtra and another] and in Crl. A. Nos. 1692-1718 of 2013 arising out of SLP (Crl.) Nos. 2970-2996 of 2012 [A.K. Singhania v. Gujarat State Fertilizer Co. Ltd., & Another]. The learned Senior Counsel for the petitioner submitted that in the judgment in Puja Ravinder case cited supra, the Hon'ble Supreme Court held that before taking cognizance of an offence making a person vicariously liable, the Magistrate has to ensure strict compliance of the statutory requirements and when the role of the appellant in the affairs of the company was not explained nor in what manner the appellant was responsible for the conduct of business of the Company, the Court ought not to have issued summons to the person. He therefore submitted that in the present case also, in the complaint except reproducing the words of Section 58C of the RBI Act, nothing has been stated about the specific role played by the petitioner in the Company or the manner in which the petitioner was responsible for the conduct of the business of the Company and in the absence of such particulars, the petitioner cannot be prosecuted on the ground that he was a Director and therefore, this petition is liable to be allowed.