In Brief
An appellant became Managing Director of a company under a Memorandum of Understanding. The company had procured and remitted foreign exchange for importing goods, but failed to complete the import (the Bill of Entry was not submitted and goods remained in a bonded warehouse). The Enforcement Directorate found this violated Section 10(6) of the Foreign Exchange Management Act, 1999, and imposed a penalty. The appellant argued he was not liable since he took over after the breach occurred. The Supreme Court held that the managing director remains liable for penalties for company contraventions regardless of when he assumed office. The failure to clear imported goods from bonded warehouse amounts to a contravention of FEMA. The appeal was dismissed."
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