Case Law Details
Abhishek Verma Vs Enforcement Directorate (Delhi High Court)
In a recent judgment delivered by the Delhi High Court, an important clarification has been made regarding the representation of companies in liquidation in legal proceedings. The case of Abhishek Verma Vs. Enforcement Directorate sheds light on the legal nuances concerning the representation of a company facing charges under the Foreign Exchange Regulations Act, 1973 (FERA).
The petitioner, Abhishek Verma, sought relief under Section 482 of the Code of Criminal Procedure, 1973 (CrPC), urging the quashing of orders framing charges against him in his capacity as the Chairman of M/s Esam India Limited. The charges were related to alleged violations under Sections 8(3), 8(4), and 68 of FERA, pertaining to transactions conducted by the company.
The crux of the petitioner’s argument rested on the fact that M/s Esam India Limited was in liquidation, and a Provisional Liquidator had been appointed for the company. Hence, according to Section 457 of the Companies Act, 1956 (applicable at the time), only the Provisional Liquidator or a person authorized by them could represent the company in legal proceedings.
The High Court’s analysis delved into the provisions of Section 68 of FERA, which deals with offenses by companies. It was noted that individuals responsible for the conduct of business of the company at the time of the alleged contravention could be deemed guilty under the Act. However, the Court emphasized the distinction between individual liability and the representation of the company in legal proceedings.
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