ENFORCEMENT DIRECTORATE Vs. AJAY BAKLIWAL

JUDGEMENT

(1.) A very interesting situation has arisen in this petition which at the threshold can be allowed in view of the judgement of the Supreme Court in Enforcemer Directorate and Another Vs. M.Samba Siva Rao and other (2000) 5 SCC 431 wherein the contentious question whether summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 (in short FERA) if not obeyed can be held to be a contravention of the provisions of the Act and whether any contravention of a direction issued under the Act, would squarely come within the ambit of Section 56 of the Act.

(2.) The aforesaid Judgment of the Supreme Court arose out of judgment and order dated 9.7.1999 passed by this court in Crl.M(M) Nos.500, 1299 of 1997,477 of 1998 3094 of 1997, 1509 of 1998, 502 of 1997 and 541 of 1998 wherein this court took the view that for contravention of provisions of Section 40 of the Act the Union Government can prosecute the accused for offences under the provisions of Section 174 or any other relevant provision under Chapter 10 of Indian Penal Code relating to contempts of the lawful authority of public servants and not under Section 56 of the Act. The view of this court was in consonance with the view of Kerala High Court in Utty Vs. Asstt. Director (1992) 58 ELT 172 (Ker) wherein it was held that the failure to obey the summons issued under Section 40(1) cannot be held to to a contravention of the provisions of the Act, rule, direction or order inasmuch as it is only when directions pertaining to some money value involved are disobeyed, such disobedience is punishable under Section 56 of the Act. In the similar vein was the judgment of Madras High Court in Criminal OPs Nos.5468 and 5629 of 1996 dated 1.8.1997 (C.Sampath Kumar Vs. A.N.Dyaneswaran).

(3.) In order to appreciate the applicability of the ratio and the judgment delivered by the Supreme Court, the facts of the instant case on which great emphasis has been laid by Mr.Satish Tamta, learned counsel for respondent need to be culled out in brief. These are as under:- 4. On 2.1.1992, officers of Enforcement Directorate searched the premises of one Shri Prakash Chahd R/6 E-5, Jangpura Extension, New Delhi and during search respondent Ajay Bakliwal visited that premises and on suspicion, search of accused was conducted by the officers of the petitioner complainant resulting in recovery of Rs.40,000/- Which amount was returned to him at the spot. However, during investigation, involvement of respondent came to light and, therefore, summons under Section 40 of FERA was issued to him on two occasions for appearance. But he did not respond to these notices and sent evasive replies on one pretext or the other. This conduct of the respondent forced the petitioner to file complaint under Section 56 of FERA on 27.1.1993. Cognizance of the offence was taken on the same date. Responding to the cognizance taken against him the respondent moved the learned trial court for discharge and dropping of the proceedings on the premise that the provisions of Section 56 of FERA was not attracted. However, this application was disposed of by learned ACMM by order dated 27.12.1994 holding that Section 56 of FERA is not attracted for disobedience to summons Under Section 40 of FERA and only an offence under Section 228 IPC was made out and he proceeded to prosecute the respondent for the said offence.