P. KARTHIYUMMA Vs. DIRECTOR OF ENFORCEMENT

JUDGEMENT

(1.) The petitioner is a retired school teacher residing at Chowghat. On 18-12-1967, the second respondent, the Assistant Enforcement Officer, Ernakulam, conducted a search of the petitioner's house, on the basis of an information that one Hasan Ali, Partner of M/s. Jahfar Stores, Mannady, Madras 1 was making payments to persons in India including the petitioner by means of bank drafts under instructions of a person residing in Penang. It happened that during the course of the search, a postman came with a registered envelope addressed to the petitioner, Which was handed over to her. The envelope was opened; and it contained a letter and demand draft for Rs. 10,000/- in her favour. The draft, along with the envelope and the letter, was seized by the second respondent. The case was investigated. In due course the first respondent, the Director of Enforcement, Ministry of Finance, New Delhi issued to the aforesaid Hasan Ali a memorandum, Ex. R3, dated 17-9-'68, requiring him to show cause in writing within 14 days of receipt of the said memorandum why adjudication proceedings as contemplated in S.23D of the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Act) should not be held against him for contravention of S.5(1)(c)of the Act. The payments alleged to have been made in contravention of the said provision amount to Rs.65,610/-A list of the persons to whom the above amount was paid is appended to Ex. R3; and No. 5 in that list is the petitioner before me. The petitioner did not, however, (hear anything from the respondents after the seizure of the draft and the letter from her possession on 18-12-1967, until she got a memorandum, Ex. P3 dated 20th September, 1969 from the first respondent. Ex. P3 called upon her to show cause within 14 days of receipt of that memorandum why adjudication proceedings as contemplated in S.23D of the Act should not be held against her for contravention of S.5(1)(aa) of the Act, in that, she received from a resident in Malaya a sum of Rs. 10,000/- as per the draft seized from her possession and why this draft should not be confiscated to the Central Government under S.23(IB) of the Act. She wrote to the first respondent by letter, Ex. P4, dated 9th October 1969, showing cause against the proposed action, and also demanding return of the draft on the ground that its retention was beyond the period allowed by S.19G of the Act was illegal. There Was no response from the respondents. The petitioner has, therefore, filed this petition to declare the proceedings against her as per Ex. P3 as illegal, to prohibit the respondents from taking any further proceedings against her, and to direct the first respondent to return to the petitioner the documents seized from her possession. The last relief alone has been pressed before me by counsel for the petitioner.

(2.) The short question that arises for decision is whether the retention of the demand draft and the letter seized from the petitioner is beyond the period permitted by S.19G of Act. If so, the petitioner is entitled to succeed, and to have a writ of mandamus directing the respondents to return the said documents to her S.19G reads:

(3.) The first contention is that the issue of a notice like Ex. R3 does not amount to starting of any proceedings, that it is only a step anterior to the starting of proceedings, and that the proceedings are started only when the authority concerned decides to do so, after considering the explanation, if any, received in reply to such a notice. S.23 deals with penalty and procedures. It does not, however, give any indication as to when the proceedings start. S.23D deals with power to adjudicate. Sub-s.(1) of that Section reads: