TMI Blog1997 (8) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 56(1)(ii) of the Act. The said proceedings have been questioned in these petitions on number of grounds. One of the grounds raised by the petitioners is that on the very reading of the provisions of the Act, Sections 40(3) and 56(1)(ii) of the Act, the criminal cases filed against the petitioners are not maintainable. 3. According to the petitioners, the reading of the above provision only illustrate that the person summoned shall attend and shall state the truth upon the subject and produce the documents. The reading of the above sub-section, nowhere whispers for a prosecution under Section 56(1)(ii) of the Act. Further, Section 40(3) of the Act does not state what will be the consequences if a person does not attend except stating that he shall attend and he should attend as per the summons and give statement or produce the documents. Sub-section (ii) of Section 56(1) speaks about the punishment only. Further, the reading of Section 56(1)(ii) of the Act measures the offence in terms and extent in the value of money involved in the contravention. This Section deals with higher punishment and lesser punishment based upon pecuniary involvement and does not refer to any contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 56 of the Act were filed for non-compliance of summons before the competent Courts. Finally, the petitioners appeared before the respondent and gave their statements. 6. The respondent has further stated that incrimination documents were seized and taken over under Section 33(2) of the Act from the Income-tax Department and the seizure of foreign exchange were all the materials available with the Department at the time of requisition of summoning the said petitioners and who with a view to defeat the very purpose and scope of the Act failed to comply with the direction under summons and thereby contravened Section 40(3) read with Section 56(1)(ii) of the Act. It is the specific case of the respondent that by failing to comply with the summons, the petitioners have failed to comply with the directions of the Enforcement Officer and hence the prosecution case was laid. 7. Section 56 of the Act is a punishment section and other section found in the Act deals with offences/powers of officers and, therefore, for contravention of the provisions of the Act, the main Section 56 of the Act is attracted. The non-compliance of summons is a non-compliance of a direction/order/rule/co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal remedies in the competent Court of law, the respondent was not justified in lodging a complaint for an offence under Section 40(3) of the Act punishable under Section 56(1)(ii) of the Act. Elaborating this contention, learned Counsel submitted that special leave petitions challenging the issue of summons under Section 40 of the Act are pending before the Supreme Court and hence, the respondent is not justified in filing the above complaint. In support of his contention, he has placed reliance on the decision in Garikapati v. Subbiah Choudhry (AIR 1957 S.C. 540) in which Paragraph 23 reads as follows : From the decisions cited above the following principles clearly emerge : (i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this contention of the learned Counsel for the petitioner. It would be appropriate here to examine both the provisions of Sections 40 and 56 of the Act. Section 40 of the Act reads as follows :- 40. Power to summon persons to give evidence and produce documents. - (1) Any Gazetted Officer of Enforcement shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document during the course of any investigation or proceeding under this Act. (2) A summon to produce documents may be for the production of certain specified documents or for the production of all documents of a certain description in the possession or under the control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by authorised agents, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required : Provided that the exemption under Section 132 of the Code of Civil Procedure, 1908 (5 of 1908) shall be applicable to any requisition for attendance under this sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as :- 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 committed 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." 14. Mr. V.T. Gopalan, in this connection invited my attention to an unreported decision of this Court in M.P. Jain v. The Assistant Director in Crl. O.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing notice to other side and hence, it is not binding on the other learned Judges. To substantiate this contention, he invited my attention to a decision of this Court regarding the binding force in Abdul Malick v. Collector of Dharmapuri [(1968) I M.L.J. 9], and quoted the following passage for reference :- Whatever may be the value of a judgment rendered without hearing arguments in full when parties are present, judgment rendered without notice or in the absence of the contesting party will not be entitled to any weight as a precedent. In cases when petitions are dismissed at the admission stage, the respondent is not present and has no opportunity to put forth his case. Admittedly, whatever observations may be made they will not bind the respondent and the judgment cannot be a precedent, because it is a judgment rendered on hearing only one side. It will be a judgment per incuriam. It may be that the Member of the Board was not aware of this position of law. But the fact that he has relied on the observations in the two decisions, which have no force as precedents is an error apparent on the face of the record. The only decision rendered after hearing both sides which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served in Paragraph 18 as follows :- It is a well-established canon of construction that the Court should read the section as it is and cannot rewrite it to suit its convenience; nor does any canon of construction permit the Court to read the section in such manner as to render it to some extent otiose. Section 8(1) says that the Special Judge shall take cognizance of an offence and shall not take it on commitment of the accused. The Legislature provided for both the positive and the negative. It positively conferred power on Special Judge to take cognizance of offences and it negatively removed any concept of commitment. It is not possible therefore, to read Section 8(1) as canvassed on behalf of the appellant that cognizance can only be taken upon a police report and any other view will render the safeguard under Section 5A illusory. 20. Mr. V.T. Gopalan, learned Senior Counsel appearing for the respondent submitted that FERA being a self-contained Act, one need not go to any other Act and the non-compliance of Section 40(3) of the Act is punishable under Section 56 of the same Act. According to him, Section 40 of the Act is a pivotal provision and if the said Section is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the definition of Foreign Exchange which is found in Section 2(h) of the Act, which reads as follows :- Foreign Exchange" means foreign currency and includes - (i) all deposits, credits and balances payable in any foreign currency and any drafts, traveller s cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency; (ii) any instrument payable, at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the order." 23. Mr. V.T. Gopalan, learned Senior Counsel submitted that non-compliance of the provision under Section 40(3) of the Act will be an offence under Section 56(1)(ii) of the Act and hence, the respondent was justified in filing the complaints and the Court entertaining the said complaints. He further submitted that in the decision of the Kerala High Court, cited on behalf of the petitioner, the Court has not considered the provision of Section 56(1)(ii) of the Act and hence, the said decision could be distinguished. According to the learned Senior Counsel, the decision of the Madras High Court, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire Section 56 of the Act is identified and substantiated only in terms of the extent and value of the money involved in the offence. It will be difficult to accept the argument of the learned Senior Counsel on behalf of the respondent that `in any other case means cases which fall within the purview of the Act irrespective of the extent or value of the money and Section 40(3) of the Act is one such offence which will come within the purview of Section 56(1)(ii) of the Act. I am in full agreement with the decision of the Kerala High Court in Itty v. Assistant Director [1992 (58) E.L.T. 172 (Ker.)] (supra). Since the judgment cited by the learned Senior Counsel for the respondent is a judgment rendered at the admission stage without issuing notice to the either side, the said decision has no binding force as held by the decision in Abdul Malick v. Collector of Dharmapuri (1968) I M.L.J. 9) (supra). Hence, I am of the opinion that the contravention of the provisions of Section 40 of the Act is not an offence which will fall within the purview of Section 56 of the Act. 26. Accordingly, for the reasons stated above, I allow these criminal original petitions and quash the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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