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26. The Appellate Tribunal has also not considered the above plea of the appellant and by making general observation that management of the Company is to be handled by the Board of Directors, hence, the appellant being Director is held guilty. No finding has been returned by the Appellate Tribunal that the appellant was not a part- time, non-executive Director and was responsible for the conduct of business of the Company at the relevant time.

27. We may also notice few judgments of this Court some of which have also been referred to by the learned counsel for the parties. A three-Judge Bench judgment in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and another, (2005) 8 SCC 89, had occasion to consider the provisions of Section 141 of the Negotiable Instruments Act, 1981 which provisions are pari materia to Section 68 of the FERA, 1973. Section 68 of the FERA, 1973 deals with Offences by Companies and is to the following effect:

(a) “company” means anybody corporate and includes a firm or other association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.”

29. A bare reading of Section 141 of Negotiable Instruments Act, 1881 indicates that sub-section (1) and sub-section (2) of Section 141 are pari materia to Section 68 of FERA, 1973 which was already in the statute. This Court in S.M.S. Pharmaceuticals (supra) had occasion to consider the requirements of Section 141. In paragraph 4 this Court lays down following:

A company, though a legal entity, can act only through its Board of Directors. The settled position is that a Managing Director is prima facie in-charge of and responsible for the company's business and affairs and can be prosecuted for offences by the company. But insofar as other Directors are concerned, they can be prosecuted only if they were in-charge of and responsible for the conduct of the business of the company.”

37. Section 68 of FERA, 1973 deals with “Offences by companies”. Section 68(1) provides that “……………every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deemed to be guilty of the contravention…………..” Section 68(1) creates a legal fiction, i.e., “shall be deemed to be guilty”. The legal fiction triggers on fulfilment of conditions as contained in the section. The words “every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business” has to be given some meaning and purpose. The provision cannot be read to mean that whosoever was a Director of a company at the relevant time when contravention took place, shall be deemed to be guilty of the contravention. Had the legislature intended that all the Directors irrespective of their role and responsibilities shall be deemed to be guilty of contravention, the section could have been worded in different manner. When a person is proceeded with for committing an offence and is to be punished, necessary ingredients of the offence as required by Section 68 should be present.

38. We may notice that Section 141 of the Negotiable Instruments Act, which was inserted in Negotiable Instruments Act by amendment in the year 1988 contains the same conditions for a person to be proceeded with and punished for offence as contained in Section 68 of FERA, 1973. Section 141(1) of Negotiable Instruments Act uses the same expression “every person, who, at the time the offence 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 offence”. Section 68 of FERA, 1973 as well as Section 141 of the Negotiable Instruments Act deals with the offences by the companies in the same manner. The ratio of the judgments of this Court on Section 141 of Negotiable Instruments Act as noted above are also clearly relevant while interpreting Section 68 of FERA Act. We, thus, hold that for proceeding against a Director of a company for contravention of provisions of FERA, 1973, the necessary ingredient for proceeding shall be that at the time offence was committed, the Director was in charge of and was responsible to the company for the conduct of the business of the company. The liability to be proceeded with for offence under Section 68 of FERA, 1973 depends on the role one plays in the affairs of the company and not on mere designation or status. This Court in S.M.S. Pharmaceuticals Ltd. (supra) while elaborating the ambit and scope of Section 141 of Negotiable Instruments Act has already laid down above in paragraph 10 of the judgment as extracted above.