M/s. Mesco Pharmaceuticals Ltd. and Others vs R.K. Rawal and Others

Sunil Gaur, J.—In a complaint (Annexure P-1) u/s 56 of The Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA) read with Sub-section (3) & (4) of Section 49 of The Foreign Exchange Management Act, 1999, petitioner-company and its four Directors have been summoned as accused by trial court vide order of 28th May, 2012 (Annexure P-2). In this petition, quashing of aforesaid criminal complaint (Annexure P-1), impugned order (Annexure P-2) and Opportunity Notice of 13th March, 2002 is sought on merits.

At the hearing, learned counsel for petitioners had placed reliance upon decisions in R.C. Gupta & Ors. v. State & Anr. 2008 [1] JCC 684; Central Bank of India Vs. Asian Global Ltd. and Others, ; National Small Industries Corp. Ltd. Vs. Harmeet Singh Paintal and Another, Arun Sood Vs. P.K. Roy, ; Subhankar Biswas Vs. Sandeep Meta, M/s. Rare Creations Ltd. & Ors. Vs. Union of India & Anr. 2010 [1] JCC 456 and Sh. Devashis Bhattacharya Vs. Union of India (UOI) and Another, to raise three contentions which are as follow:-

(i) That no opportunity notice as contemplated u/s 61(ii) of the FERA, 1973 was given to the petitioners before filing of the complaint u/s 56 of the FERA.

(ii) That relied upon documents were not furnished to the petitioners before filing of the complaint u/s 56 of the FERA;

(iii) Role of each of the individual accused Directors is not specified in the complaint.

To resist this petition, learned Central Government Standing Counsel on behalf of respondents had placed reliance upon decisions i The Assistant Director, Enforcement Directorate, Government of India Vs. Khader Sulaiman, P. Krishnasamy and J. Sampath Kumar, A.S.G. Jothimani Nadar Vs. Deputy Director, Enforcement Directorate 1984 Law Suit(Mad) 47 decided on 24.02.1984; LPA No. 405/2009 J.K. Singh, Director, M/s. Mesco Pharmaceuticals Ltd. Vs. UOI & Ors. decided on 08th September 2009; N. Rangachari Vs. Bharat Sanchar Nigam Ltd., and Standard Chartered Bank and Others Vs. Directorate of Enforcement and Others, and had asserted that the contentions of petitioners are untenable because notice u/s 51 of FERA served upon petitioners constitutes a valid notice for the purpose of proviso to Section 61 (2) of FERA.

It was maintained on behalf of respondents that in the complaint (Annexure P-1) in question, specific role has been attributed to petitioners and attention of this Court was drawn to paragraph No. 2 (vii) & (viii) of the complaint (Annexure P-1). It was disputed on behalf of respondents that documents relied upon in the complaint were not served upon petitioners. Lastly, it was maintained on behalf of respondents that the contentions raised in this petition are triable issues, which cannot be determined at the threshold in exercise of inherent jurisdiction u/s 482 of Cr.P.C. Thus, dismissal of this petition is sought.

During the course of hearing, learned counsel for petitioners had referred to Government Circular (Annexure P-8) and had pointed out that the alleged contravention is of not more than sixty seven lakhs rupees and as per aforesaid Circular, the contravention of two crores rupees or above attracts the provisions of FERA, under which petitioners are being prosecuted.

Upon hearing and on perusal of the impugned complaint, the material on record and the decisions cited, I find that respondents maintain in their counter affidavit that Opportunity Notices in terms of Section 67 of FERA were issued to petitioners and the documents relied upon in the complaint in question were supplied to petitioners. However, petitioners dispute it. This raises a triable issue which is required to be determined at trial.

The stand of petitioners that there was no intentional or wilful default on their part also raises a triable issue which cannot be determined while exercising inherent jurisdiction of this Court u/s 482 of Cr.P.C. and that too, at the threshold of these proceedings.

Regarding the role of petitioners, the averments made in paragraph No. 2 (vii) & (viii) of the complaint in question prima facie justify continuance of proceedings arising out of this complaint. So far as the applicability of Circular (Annexure P-8) is concerned, I find that the alleged contravention is of the year 1995-96 and Circular (Annexure P-8) is of 5th July, 2001 and at the hearing, it was not shown by petitioners'' counsel that Circular (Annexure P-8) can be made to operate retrospectively. Pertinently, prosecution of petitioners in the instant Complaint (Annexure P-8) is for contravention of substantive provisions of this enactment i.e. Section 14, 16 & 18(3) of FERA read with Central Government''s Notification No. F-1/67/EC/73-1 & 3 both of 1st January, 1974. So, this question as well as the question of vicarious liability is left open to be considered at the stage of framing of charge/Notice u/s 251 of Cr.P.C., as the case may be. In light of the aforesaid, this petition is disposed of with liberty to petitioners to urge the pleas taken in this petition on the afore-noted limited extent before the trial court at the stage of framing of charge/Notice, while not commenting upon the merits, lest it may prejudice either side.