N SREENIVASAN Vs. DIRECTOR OF ENFORCEMENT NEW DELHI

JUDGEMENT

(1.) The petitioners' premises were searched on 26-9-1970 and their Post Office Savings Bank Account Book and certain other documents were seized by the Asst. Director, Enforcement Directorate, Shastri Bhavan, Madras. Ext. P1 notice dated 22nd December 1970 was issued to the petitioners stating that the 1st petitioner had received without general or special exemption from Reserve Bank of India four payments amounting to Rs. 24,200/- from persons other than authorised dealers in foreign exchange by order or on behalf of Shri N. Sadanandan of Malaysia and that there was a contravention of the provisions of certain specified sections of the Foreign Exchange Regulations Act 1947. He was, therefore, called upon to show cause why adjudication proceedings contemplated in S.23D of the Foreign Exchange Regulations Act 1947 should not be held against him for the contravention and why the amount of Rs. 20,000/- deposited in his savings bank account and Rs. 4000/- deposited in his mother's (2nd petitioner's) account at the Post Office, Vaikom should not be confiscated to the Government. Both the petitioners submitted explanations dated 8-1-1971. In order to receive back their pass book, they sent Ext. P2 petition dated 25-9-1971 praying for the return of the postal savings Bank Pass Book to Vaikom Branch. As there was no compliance with this request, petitioners moved this writ petition praying for a direction, for the return of the two pass books and for a direction that any action in pursuance of Ext. P1 notice beyond one year of its retention, is illegal and for certain other consequential orders.

(2.) The petitioners placed reliance on S.19G of the Foreign Exchange Regulation Act 1947, which enables the concerned officers to retain the documents searched or seized only for a period not exceeding one year. For the Respondents, reliance is placed on the latter part of the section which allows them to retain the seized documents for a longer period, if before the expiry of the said period of one year proceedings under S.23 have been "commenced". If so, under Clause.(a) of S.19G the authorities are given the right to retain the documents until the disposal of those proceedings, It was claimed that the issuance of Ext. P1 notice on 22-12-1970 amounted to a "commencement" of the proceedings which have not yet been disposed of, and therefore the retention of the documents was valid and proper. The question is whether this claim is well founded.

(3.) S.23 of the Act provides that for contravention of certain specified sections of the Act, a person shall be liable to penalty which might be adjudged "in the manner provided". The manner of adjudication is provided by the following sections, S.23D, which is one of the important sections, reads: