1990 (8) TMI 288 - HC - FEMA

Conviction u/s 56(1)(ii) read with Section 40(1) of the Foreign Exchange Regulation Act (Act) - Failure to appear and to produce the documents summoned by the Enforcement Director - contravention of the provisions of the act - Meaning of word contravention - HELD THAT - When a person has been summoned to appear by a competent authority it means that he has been directed/ordered to appear before him. Summons has to be obeyed but disobeyance is not contravention which is a matter coming under Section 174 I.P.C. In my view it is a legal fallacy to say that the failure to obey the summons as per Section 40(1) of the Act is a contravention of the provisions of the Act Rule direction or order. This is also clear from the fact that Section 56 of the Act mentions about offences with particular reference to amount or value involved in them. It may not be possible to say that the offences committer by the petitioner could be computed in terms of value or amount to attract Section 56 of the Act. In terms Section 56 could not apply to a case coming under Section 40 of the Act. Indeed if it is held otherwise there is no doubt that the consequences would be serious. It will be possible for over zealous officers to institute ill-motivated and vindictive prosecutions to harass innocent persons. It is one of the cardinal principles of interpretation that an intention to produce an unreasonable result is not to be imputed to a statute if there was some other construction available. Thus there was no contravention of the provisions of the Act by the petitioner by refusing to attend before the Enforcement Officer as per summons he received. The prosecution for an offence under Section 56 of the Act was certainly misconceived. I am unable to sustain the conviction and sentence and they are hence set aside. Petitioner is acquitted. Cri. R.P. is allowed.

Summary

Issues:
1. Conviction under Section 56(1)(ii) read with Section 40(1) of the Foreign Exchange Regulation Act.
2. Failure to appear and produce documents summoned by the Enforcement Director.
3. Interpretation of Section 40(1) of the Act and consequences of non-appearance.
4. Contravention of provisions of the Act to attract Section 56.
5. Definition of "contravention" and legal implications.
6. Application of Section 56 to the case under Section 40 of the Act.
7. Principles of interpretation of penal statutes and strict construction.

Analysis:

The petitioner was convicted under Section 56(1)(ii) read with Section 40(1) of the Foreign Exchange Regulation Act for failing to appear and produce documents summoned by the Enforcement Director. The conviction and sentence were confirmed by the Sessions Judge, which the petitioner challenged in revision. The key issue was whether the failure to obey a summons under Section 40(1) constitutes an offense under Section 56 of the Act.

The Act empowers Enforcement Officers to summon individuals for investigations or proceedings. The petitioner accepted the summons but failed to appear, leading to the question of the consequences of non-appearance. Section 56 outlines offenses and penalties for contraventions of the Act, rules, or orders made thereunder. The central issue was whether the petitioner's actions amounted to a contravention under Section 56.

The term "contravention" was analyzed using various legal dictionaries, emphasizing that disobeying a summons does not necessarily constitute a contravention of the Act. The court highlighted that Section 56 pertains to offenses with a quantifiable value, which may not apply to cases under Section 40. Imposing Section 56 for non-appearance could lead to potential misuse and harassment by authorities.

The judgment emphasized the cardinal principle of interpreting penal statutes strictly and avoiding unreasonable results. It cited legal authorities to support the view that the petitioner's actions did not amount to a contravention under the Act. The court concluded that the prosecution under Section 56 was misconceived, setting aside the conviction and acquitting the petitioner in the revision.

In conclusion, the judgment delved into the nuances of statutory interpretation, the definition of contravention, and the application of penal provisions in specific contexts. It underscored the importance of upholding legal principles and protecting individuals from unwarranted prosecutions, ultimately leading to the petitioner's acquittal in the revision.