Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Del) 455

IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Abhishek Verma - Appellant
Versus
Enforcement Directorate - Respondent
Cr.M.C. 3732 of 2011
Decided On : 26-02-2024

Advocates appeared:
Mr.Maninder Singh, Senior Advocate with Mr.Dinhar Takiar, Ms.Aerita Vats, Ms.Simran Chawdhary and Mr.Yash Singh, Advocates, for the Petitioner.
Mr.Rajat Nair, SPP with Mr.Imon Bhattacharya, Advocate, for the Respondent.

IMPORTANT POINT
The central legal point established in the judgment is the requirement for proper representation of a company in trial proceedings, as provided in Section 305 of the Companies Act, 1956, and the liability of individuals in charge of the company for contraventions under Section 68 of the Foreign Exchange Regulations Act, 1973.

Headnote:
CrPC - Quash the order on charge and charge dated 16.06.2007 and 03.08.2007 respectively passed by the LD. ACMM in the matter of Enforcement v. M/s ESAM India Limited in CC.NO 91/1/2002 to the extent that the petitioner is not representing M/s ESAM India Ltd. - Section 482, Code of Criminal Procedure, 1973 - Section 305, Companies Act, 1956 - Section 68, Foreign Exchange Regulations Act, 1973 - The court discussed the provisions of Section 68 of the Foreign Exchange Regulations Act, 1973 and Section 305 of the Companies Act, 1956, highlighting the requirement for representation of a company in trial proceedings and the liability of individuals in charge of the company for contraventions. The court's decision was influenced by the interpretation of these provisions, leading to the modification of the charge against the company through the appointed Provisional Liquidator.
Fact of the Case:
The petitioner sought to quash the order on charge and charge dated 16.06.2007 and 03.08.2007 respectively, arguing that as the company, M/s Esam India Limited, was in liquidation and a Provisional Liquidator had been appointed, only the Provisional Liquidator could represent the company in the trial.
Finding of the Court:
The court found that the charge against the company had been erroneously framed through the petitioner, instead of the appointed Provisional Liquidator, and modified the impugned order dated 03.08.2007 to reflect this correction. The charges framed against the petitioner in his individual capacity were not interfered with.
Issues: The main issue was whether the charge against the company could be framed through the petitioner, who was not authorized to represent the company in the trial.
Ratio Decidendi: The court relied on the provisions of Section 305 of the Companies Act, 1956, which allows a company to appoint a representative for trial proceedings, and Section 68 of the Foreign Exchange Regulations Act, 1973, which imposes liability on individuals in charge of the company for contraventions.
Final Decision: The court modified the impugned order to reflect that the charge against the company must be through the appointed Provisional Liquidator, not the petitioner, and disposed of the petition accordingly.

JUDGMENT

1. This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (in short, `CrPC') praying for the following relief:

"(a) Quash the order on charge and charge dated 16.06.2007 and 03.08.2007 respectively passed by the LD. ACMM in the matter of Enforcement v. M/s ESAM India Limited in CC.NO 91/1/2002 to the extent that the petitioner is not representing M/s ESAM India Ltd."

2. The petitioner is aggrieved of the order dated 16.06.2007 passed by the learned Additional Chief Metropolitan Magistrate, New Delhi (hereinafter referred to as `ACMM') passed in CC No. 91/1/2002 titled Enforcement v. M/s Esam India Ltd. etc., insofar as it holds as under:

"I hereby hold that prima facie the accused no. 1 Esam India Limited through the accused no. 2 Abhishek Verma who was the Chairman of the Accused no.1 Company had contravened the provisions of Section for the alleged violations u/s. 8 (3), 8(4) and Section 68 of FERA for which a charge u/s. 56 of FERA is required to be framed."

3. The petitioner is also aggrieved of the Impugned Order dated 03.08.2007, whereby the following charge has been framed:

"I, Sh. Ajay Kumar Kuhar, ACMM, New Delhi do hereby charge you accused M/s. Eassm India Ltd. (Now changed as AltaVista (India) Ltd.) through its Chairman Abhishek Verma and Abhishek Verman, Chairman of M/s. Essam India Ltd. (now changed as altavista (India) Ltd. as under:

That in the year 1997 by acquiring foreign exchange to the turne of US dollar 3,40,000/- you, a company person other than an authorized dealer or money changer for the particular purpose of importing computer system from M/s. European Capital Ltd. Sharja UAE and by failing to import the said goods of value of representing the foreign exchange so acquired without any permission of RBI you M/s. Essam India Ltd. thereby committed offences under section 8(3) read with 8(4) of FERA 1973 punishable u/s 56 of FERA, and you Abhishek Verma Chairman of M/s. Essam India Ltd. Thereby committed offences under section 8(3) read with 8(4) of FERA 1973 and also read with section 68 of FERA 1973 punishable u/s 56 of FERA, 1973 within my cognizance.

I hereby direct that you be tried of the above said offence by this court."

(Emphasis supplied)

4. The limited challenge of the petitioner to the Impugned Order and charge is that the Company, that is, M/s Esam India Limited, being in Liquidation and a Provisional Liquidator having been appointed for it, only the Provisional Liquidator can represent the Company in the proceedings pending before the learned ACMM and not the petitioner herein.

Petitioner's Submissions

5. The learned senior counsel for the petitioner submits that the petitioner had resigned from the Company in the year 1993, that is, much before the alleged transaction that took place in 1997.

6. He submits that, in any event, for the said Company, by an Order dated 14.05.1999 passed in Company Petition No. 215/1998, a Provisional Liquidator has been appointed. He submits that, therefore, charges against the Company cannot be framed through the petitioner herein as the petitioner no longer has the authority to represent the Company in the trial as is required under Section 305 CrPC. He submits that as far as separate charges against the petitioner in his individual capacity are concerned, without admitting them, the petitioner does not challenge the same at this stage and is ready to face the trial on the same.

Respondent's Submissions

7. On the other hand, the learned counsel for the respondent submits that the learned ACMM, in the Order dated 16.06.2007, has given detailed reasons for not accepting the plea of the petitioner that he had resigned from the Company in the year 1993 or that he did not have the control over the affairs of the said Company at the time of the alleged transaction and thereafter. He submits that, therefore, charge under Section 68 of Foreign Exchange Regulations Act, 1973 (hereinafter referred to as `Act') has been rightly framed against t