JAI PRAKASH Vs. STATE

JUDGEMENT

(1.) By order, made on January 23, 1989 in exercise of powers conferrd by Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (as amended) (for short 'the Act') the petitioner was ordered to be detained with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange. Briefly the facts, as emerging from the grounds of detention are these :-

(2.) The officers of Delhi Zonal Office of the Enforcement Directorate, on the basis of reliable information, conducted search on two business premises and one residential premises of the petitioner on July 12, 1988 under section 37 of the Foreign -Exchange Regulation Act, 1973 (for short 'the FERA'). As a result Rs. l,04,000.00 and documents were recovered and seized from one business premises and certain documents were recovered and seized from residential premises. Nothing was seized from the other business premises. While the searches were on at the two business premises certain persons were found in suspicious circumstances outside/inside the business premises. The personal search of the said persons under section 34 of the FERA resulted in recovery and seizure which are as follows :- <FRM>JUDGEMENT_8_DLT41_1990Html1.htm</FRM>

(3.) The aforesaid persons were also examined under Section 40 of the FERA on the same date i.e. July 12, 1988. Some of them stated that they had come and some slated that they were going to the shop of the petitioner to exchange the seized currency. The statement of the petitioner was also recorded on July 12, 1988 and he was confronted with documents seized from his business premises but he preferred not to implicate himself in the statement. However, documents seized from the business premises of the petitioner revealed his indulgence in the compensatory payments racket despite the fact that the petitioner chose not to incriminate himself. As a follow up action, statements of certain other persons were also recorded. The petitioner was arrested under Section 35 of the FERA on 13th July 1988 and was ultimately released on bail on August 9,1988. In view of the facts disclosed in the grounds of detention the detaining authority arrived at the conclusion that the petitioner has been not only indulging in receiving and making payments in India unauthorisedly under instructions from persons resident outside India but was also indulging in unauthorised sale and purchase of foreign exchange in violation of the provisions of the FERA. The detaining authority on being satisfied that the unauthorised transactions indulged in by the petitioner have affected the foreign exchange resources of the country adversely, directed the detaining of the petitioner under the Act with a view to preventing him from indulging in activities prejudicial to the agumentation of country's foreign, exchange resources.