Raghunath was the General Manager (Forex) in a company named as Impex Overseas Ltd., during the period 1st January, 2018 to 31st March, 2020. He retired from the services of the company at the close of business on 31st M

Answer 1(d) According to Section 42(1) of Foreign Exchange Management Act, 1999, where a person committing a contravention of any of the provisions of the said Act or of any rule, direction or order made there under is a company, every person who, at the time the contravention 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 contravention and shall be liable to be proceeded against and punished accordingly. Nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised due diligence to prevent such contravention. According to Section 42(2), where a contravention of any of the provisions of the said Act or of any rule, direction or order made there under has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Thus, as per the above provisions, since Raghunath was in charge of forex Division at the time of occurrence of the contravention and it happened on account of his negligence, hence, he is also liable along with the company to be proceeded against and punished under the provisions of FEMA. Accordingly, Raghunath shall be liable to pay the penalty leviable/levied on him by the appropriate authority under FEMA. However, as regards the penalty leviable/levied separately on the Company, the same cannot be recovered from Raghunath, except in accordance with the terms of his employment agreement, because Section 42 clearly holds the company as well separately liable for penalty in case of contravention.