O R D E R

These writ petitions are filed by four individuals, who are all employees of various banks. The petitioner in WP.No.16359 of 2016 was holding the post of Assistant General Manager, Canara Bank Mid Corporate Branch, the petitioner in WP.No.16352 of 2015 was formerly, the Chairman of the Catholic Syrian Bank, the petitioner in WP.No.17520 of 2016, the Deputy General Manager, State Bank of Hyderabad and the petitioner in WP.No.17511 of 2016 is Assistant General Manager, United Bank of India.

2. R2 in all writ petitions is one Gangotri Textiles Ltd. (R2/assessee) that had availed of a scheme promulgated by the Government of India under the Foreign Trade Policy, the Export Promotion Capital Goods Scheme (Scheme/EPCG Scheme). The Scheme entitled a beneficiary to import capital goods and set up manufacturing facilities at concessional rate of customs duty.

3. The grant of this benefit is subject to certain conditions that would have to be satisfied by the assessee, in that, the quantum of export would have to be eight times the customs duty saved. This is to ensure that the revenue that is forgone by the Government in duty, is compensated by the inflow of export earnings. The aforesaid export obligation is a pre-condition to the availment of the benefit under the Scheme.

4. It is the case of the first respondent that R2 had not satisfied the export obligation and it is thus the impugned order has been passed as against the present petitioners. The order refers to certain show cause notices that have been issued, presumably to R2 and its directors, invoking the provisions of Section 140 of the Customs Act, 1962 (in short 'Act').

5. The fate of those proceedings as against company/R2 and it is erstwhile directors was not successful insofar as the company had gone into liquidation. The

https://www.mhcd.tne.gtoavi.lins/j uodifs the proceedings initiated are unavailable since the present petitioners

state that they are wholly unconnected and unconcerned with those proceedings and are hence, unaware of the same.

6. Be that as it may, R2 had also availed of financial facilities from banks and had applied for restructuring of the corporate debt. A consortium of banks had approved the restructuring on 26.12.2008, sanctioning the scheme and directing implementation thereof.

7. The Corporate Debt Restructuring (CDR) empowered group comprised various Banks, that is, the State Bank of India, Syndicate Bank, State Bank of Travancore, State Bank of Hyderabad, United Bank of India, Canara Bank, Corporation Bank, State Bank of Mysore and IDBI Bank Limited.

8. The State Bank of India was identified as the Monetary Institution and the other banks as above, were to be joint lenders in the CDR empowered group. The CDR Cell, Mumbai, under communication dated 06.01.2009 approved the restructuring proposal and consequently, a Master Restructuring Agreement had been executed on 26.03.2009 along with a Trust Retention Agreement in favour of the Monitoring Institution and joint lenders.

9. It is pursuant to this and in line with the procedure normally followed, that the present petitioners had been appointed as nominee directors to oversee the performance of the company and to liquidate the liability of the CDR Banks. They have, admittedly, not received any show cause notice/notice prior to passing of the

https://www.mhci.tmn.gpovu.ign/njuedids order by the Deputy Director General of Foreign Trade/R1 fastening

liability upon them for non-adherence to the terms and conditions of the EPCG Scheme.

10. Section 140 of the Customs Act, stipulates that, any person, who, at the time of offence was committed by a company, shall be deemed to be guilty of the offence and liable to be proceeded with and punished accordingly.

11. Section 2(13) of the Companies Act, 1956 defines a ‘director’ to include any person occupying the position of director, by whatever name called. Thus, R1 would advance the argument that nominee director would also satisfy the definition of director, w