TMI Blog2011 (2) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and the prosecution are distinct and separate. No doubt, the conclusion of the adjudication, in the case on hand, the decision of the Special Director dated November 18, 1996, may be a point for the appellant and it is for him to put forth the same before the Magistrate. Inasmuch as the FERA contains certain provisions and features which cannot be equated with the provisions of the Income-tax Act or the Customs Act and in the light of the mandate of section 56 of the FERA, it is the duty of the criminal court to discharge its functions vested with it and give effect to the legislative intention, particularly, in the context of the scope and object of the FERA which was enacted for the economic development of the country and augmentation of revenue. Though the Act has since been repealed and is not available at present, those provisions cannot be lightly interpreted taking note of the object of the Act. - appeal dismissed. - Criminal Appeal No. 1097 of 2003 - - - Dated:- 18-2-2011 - HARJIT SINGH BEDI, SATHASIVAM P., CHANDRAMAULI KR. PRASAD, JJ A. Sharan, Senior Advocate (Puneet Jain, Sushil Kr. Jain, Pramod Sharma, Anil K. Verma and Ms. Pratibha Jain, Advocates, with him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 30 per dollar (approximately), contravened the provisions of section 8(2) of the Act. Further the said payment having been made without any general or special exemption from the Reserve Bank of India, the appellant had contravened the provisions of section 9(1)(f)(i) of the Act and accordingly rendered himself liable to imposition of penalty under section 50 of the Act. The Enforcement Directorate was further of the opinion that by abetting in contravening the provisions of sections 9(1)(f)(i) and 8(2) of the Act read with the provisions of section 64(2) of the Act the appellant has rendered himself liable for penalty under section 50 of the Act. 3. Accordingly, a show-cause notice dated May 7, 1993 was issued by the Special Director of the Directorate of Enforcement calling upon the appellant to show cause as to why adjudication proceedings as contemplated under section 51 of the Act be not held against him for the contraventions pointed above. Show-cause notice dated May 7, 1993 referred to above led to institution of proceedings under section 51 of the Act (hereinafter referred to as the "adjudication proceedings"). The adjudication officer came to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a is absconding, therefore, his case is being decided on the merits. However, since the charges against Shri Radheshyam Kejriwal for contravening the provisions of section 9(1)(f)(i) and section 8(2) read with section 64(2) of the Foreign Exchange Regulation Act, 1973, cannot be sustained, the charges against Shri Piyush Kumar Barodia can also not be sustained. Therefore, the charges against S/Shri Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain @ Babubhai Bhansali, are not sustainable for contravening the provisions of sections 9(1)(f)(i) and 8(2) read with section 64(2) of the Foreign Exchange Regulation Act, 1973. In view of the foregoing, the proceedings initiated against S/Shri Piyush Kumar Barodia, Radheshyam Kejriwal, Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain @ Babubhai Bhansali, vide the impugned memorandum, are hereby dropped." 4. It is common ground that the Enforcement Directorate has not challenged this order and it has attained finality. 5. It is relevant to state that any person contravening the provisions of sections 8 and 9 of the Act besides other provisions is also liable to be prosecuted under section 56 of the Act without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same view on the materials on record which have prompted the departmental authority to find the allegations not substantiated. As it has been already pointed out, the procedure according to which the trial of such an accused by the court it held has some special features and the two testing processes are so divergent that there is ample scope for the two parallel authorities to hold even diametrically opposite views so far as the question of proof of the charge against the accused is concerned. Most of the decisions relied upon by Mr. Ghosh and discussed above in respect of his above contention cannot be attracted to our present case for the simple reason that none of those judicial pronouncements are relating to a case under the Foreign Exchange Regulation Act the provisions of which cannot be equated with those of the Income-tax Act or Customs Act." 7. Being aggrieved, the appellant is before us with the leave of the court. 8. Mr. Amarendra Sharan, senior counsel appearing on behalf of the appellant submits that the standard of proof required to bring home the charge in a criminal case is much higher than in the adjudication proceedings and once the appellant has been exon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule, direction or order made thereunder the adjudicating officer is to be satisfied that the person has committed the contravention after holding an inquiry in the prescribed manner and after giving the person concerned a reasonable opportunity of making representation. Thus besides the procedural requirement the sine qua non for imposition of penalty under section 51 of the Act is that the adjudicating officer has to record his satisfaction that the person concerned has committed the contravention of any of the provisions of the Act or of any rule, direction or order made thereunder. 12. As would be evident from the preamble to the Act, it was enacted for the conservation of foreign exchange resources of the country and the proper utilization thereof in the economic development of the country. It is relevant here to mention that the Forty-Seventh Report of the Law Commission of India on the Trial and Punishment of Social and Economic Offences quoted the following portion from the Report of the Study Team on Leakage of Foreign Exchange through Invoice Manipulation : ". . . like the Customs Act, there should be a provision that for an offence in the Foreign Exchange Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched only after the completion of an adjudication under section 51 of the Act." 15. However, in a case like the present one in which the penalty proceeding under section 51 of the Act and the prosecution under section 56 of the Act though launched together but the penalty proceeding culminated earlier exonerating the person, the question would arise as to whether continuance of the prosecution would be permissible or not. In other words, the question with which we are concerned is the impact of the findings which are recorded on the culmination of adjudication proceedings on criminal proceedings and in case in the adjudication proceedings the person concerned is exonerated can he ask for dropping of the criminal proceedings on that ground alone. Mr. Malhotra submits that finding in the adjudication proceeding cannot either operate as estoppel or res judicata in the case * [2006] 130 Comp Cas 341, 359of prosecution under section 56 of the Act and in this connection, he has drawn our attention to a Constitution Bench judgment of this court in the case of Assistant Collector of Customs v. L. R. Melwani, AIR 1970 SC 962, 965*, wherein in paragraph 8, it has been held as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred under article 20(2) of the Constitution which says that no person shall be prosecuted and punished for the same offence more than once. This article has no direct bearing on the question at issue. Evidently those accused persons want to spell out from this article the rule of autre fois acquit embodied in section 403, Criminal Procedure Code. Assuming we can do that, still it is not possible to hold that a proceeding before the Collector of Customs is a prosecution for an offence. In order to get the benefit of section 403, Criminal Procedure Code or article 20(2), it is necessary for an accused person to establish that he had been tried by a `court of competent jurisdiction' for an offence and he is convicted or acquitted of that offence and the said conviction or acquittal is in force. " 18. In the present case, it is not the case of the appellant that they were tried by the Enforcement Directorate and therefore further trial by the criminal court is not permissible but their contention is that in the face of the finding in the adjudication proceeding, their continued prosecution is an abuse of the process of the court. In view of what we have observed above, the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bench had not considered the effect of a finding of fact in a civil case over the criminal cases and that will be evident from the following passage from the said judgment (page 27) : "I must, however, say that in answering the question, I have only referred to civil cases where the actions are in personam and not those where the proceedings or actions are in rem. Whether a finding of fact arrived at in such proceedings or actions would be relevant in criminal cases, it is unnecessary for me to decide in this case. When that question arises for determination, the provisions of section 41, Evidence Act, will have to be carefully examined." 21. This court had the occasion to consider this question in the case of K. G. Premshanker v. Inspector of Police [2002] 8 SCC 87, wherein it has been held as follows : "30. What emerges from the aforesaid discussion is-(1) the previous judgment which is final can be relied upon as provided under sections 40 to 43 of the Evidence Act ; (2) in civil suits between the same parties, the principle of res judicata may apply ; (3) in a criminal case, section 300, Criminal Procedure Code makes provision that once a person is convicted or ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case is forged and while holding that the bar would not operate if the will is forged before its filing in the court, hence the aforesaid observation of this court has no bearing in the facts and circumstances of this case. 25. It is trite that the standard of proof required in criminal proceedings is higher than that required before adjudicating authority and in case the accused is exonerated before the adjudicating authority whether his prosecution on the same set of facts can be allowed or not is the precise question which falls for determination in this case. There are authorities of this court in relation to the Income-tax Act in this regard. The first in the series is the judgment of this court in the case of Uttam Chand v. ITO [1982] 2 SCC 543* in which registration of firm was cancelled on the ground that it was not genuine and prosecution initiated for filing false return. However, * [1982] 133 ITR 909 (SC) in appeal, the Income-tax Appellate Tribunal reversed the finding and held the firm to be genuine. Relying on that, this court quashed the prosecution inter alia observing as follows : "1. Heard counsel, special leave granted In view of the finding recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, the High Court has taken the view that the charges have been framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and the High Court is fallacious. In our view, if the trial is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of the Tribunal exhibited as a defence document inasmuch as the passing of the order as aforementioned is unsustainable and unquestion- able." 28. Mr. Sharan contends that the aforesaid principle shall apply with equal force in the prosecution under the Act as the basic principle which these judgments take note of to quash the prosecution is the higher standard of proof required in a criminal case than in the adjudication proceeding and no reference at all has been made to the provisions of the Income-tax Act to come to that conclusion. The decisions referred to above pertain to prosecution under the Income-tax Act and obviously had not adverted to any of the provisions of the Act, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its, prosecution may continue ; and (vii) In case of exoneration, however, on the merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. 30. In our opinion, therefore, the yardstick would be to judge as to whether the allegation in the adjudication proceeding as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceeding is on the merits. In case it is found on the merits that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be in abuse of the process of the court. 31. In the submission of Mr. Malhotra the matter stands squarely covered by the decision of this court in the case of Standard Chartered Bank (supra) which submission has found favour with learned brother Sathasivam J. We deem it expedient to consider the ratio and background of the said case in a little detail. In the said case alleging violation of some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 56 of the Act and the submission was made that criminal action cannot wait till the outcome of the adjudication proceeding. In the context of the aforesaid argument this court observed that proceedings under sections 51 and 56 of the Act are proceedings independent of each other and can be initiated simultaneously and a finding in an adjudication proceeding is not binding on the court in a proceeding for prosecution under section 56 of the Act. The effect of a finding of exoneration in the adjudication proceedings on criminal proceeding was not an issue and, therefore, the judgment under consideration cannot be said to have decided this question with which we are concerned in the present appeal. A learned single judge of the Bombay High Court had the occasion to consider this question in a case under the Foreign Exchange Regulation Act in Criminal Application No. 1070 of 1999 (Hemendra M. Kothari v. Shri W. S. Vaigankar, Assistant Director, Enforcement Directorate (FERA), Government of India and State of Maharashtra), decided on April 25, 2007 and on a review of a large number of decisions of this court and other courts it came to the following conclusion : "21. It may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the Departmental proceedings that ex facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on the merits holding that there is no contravention of the provisions of any Act." 35. We respectfully endorse the view taken by the Bombay High Court in the case of Hemendra M. Kothari (supra) and the Delhi High Court in Sunil Gulati (supra). 36. Bearing in mind the principles aforesaid we proceed to consider the case of the appellant. In the adjudication proceeding on the merits the adjudicating authority has categorically held that "the charges against Shri Rad- heshyam Kejriwal for contravening the provisions of section 9(1)(f)(i) and section 8(2) read with section 64(2) of the Foreign Exchange Regulation Act, 1973 cannot be sustained". In the face of the aforesaid finding by the Enforcement Directorate in the adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t amount of foreign exchange to the agents of such intending persons abroad. (b) On December 9, 1994, the Enforcement Directorate, before receiving the reply from the appellant herein, in response to the notice dated May 7, 1993, issued another show-cause notice under section 61 of the FERA for taking cognizance of the offences committed on account of the contravention of the provisions of the FERA. On September 7, 1995, without waiting for the reply of the appellant in response to the two notices, one under section 51 for adjudication of penalty proceedings and the other under section 61 for taking cognizance of the offence, a complaint was filed by the Department under section 56 of the FERA alleging violation of the provisions contained in sections 8(2) and 9(1)(f)(i) of the FERA. The Special Director, Enforcement Directorate, FERA, New Delhi after going through the entire record and the evidence, vide order dated November 18, 1996, acquitted the appellant by holding that no penalty could be imposed as there is no proper evidence to connect the appellant with the contravention of any of the provisions of the FERA and accordingly directed to drop the proceedings and discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of both sides, the Special Director passed an order dated November 18, 1996, holding that the Enforcement Directorate had failed to make out a prima facie case in support of the charges of violation of sections 8(2) and 9(1)(f)(i) of the FERA and directed that the aforementioned Departmental proceedings be dropped. It is relevant to point out that in the meantime, i.e., on July 26, 1995, the respondents filed a complaint against the appellant in the court of the Chief Metropolitan Magistrate, Calcutta on the same cause of action which was taken cognizance by the Magistrate. According to the appellant, inasmuch as the same issues having already been adjudicated by the authority concerned, the Magistrate ought to have dropped the complaint and continuation of the proceedings would result in abuse of the process of the court. Aggrieved by the order of the Magistrate in not dropping the proceedings and continuing the same, the appellant preferred revision before the High Court being CRR No. 3593 of 1997. By the impugned order, the High Court accepting the stand of the Department refused to quash the criminal proceedings and dismissed the revision. 42. In order to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or with fine or with both." 43. Mr. Amarendra Sharan, learned senior counsel for the appellant, after taking us through the above provisions as well as the order dated November 18, 1996 of the Special Director, Enforcement Directorate, dropping the departmental proceedings, submitted that in view of the said conclusion and of the fact that the Department had not challenged the same by way of further appeal, there cannot be criminal prosecution for the same cause of action under section 56(1) of the FERA. 44. I have gone through the order of the Special Director dated November 18, 1996. I have already pointed out that pursuant to the search and seizure, after issuance of show-cause notice and opportunity of hearing, the Special Director, Enforcement Directorate passed the above order. After considering all the materials and finding that no incriminating documents relating to foreign exchange transactions and further finding that the charges against the appellant for contravening the provisions of sections 8 (2) and 9(1)(f)(i) read with section 64(2) of the FERA cannot be sustained, the Special Director dropped the proceedings initiated against the appellants and others. Adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant as Rs. 52,634 and this figure was arrived at by adding the income of M/s. Young India and Trans-port Company and for the same assessment year as though it was the income of the appellant. The appellant made a statement in the verification to the return filed on December 2, 1971 and delivered an account/statement which according to the assessing authority was false or the assessee knew or believed to be false. On the basis of this assessment, prosecution was launched and the complaint by the authorised authority was filed on September 9, 1977. Meanwhile, the appellant-assessee filed an appeal before the Income-tax Appellate Tribunal and the Tribunal by its order dated February 24, 1977 allowed the appeal and held that there was no substantial material to hold that the appellant was the owner of the entire business. The Appellate Tribunal also observed that the assessing authority arrived at a wrong conclusion from the facts on record and held that the business run in the name of M/s. Young India and Transport Company belonged to the assessee and accordingly the appellate authority deleted the addition of Rs. 23,134 from the total income of the assessee. After the Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished, the Department is not permitted to pursue the same charge in the criminal proceeding. 50. The last decision relied on by the counsel is Uttam Chand*** (supra). This decision also arose under the Income-tax Act. Without adverting to any statutory provisions and the earlier decisions, confining to the facts of this case, noting the finding recorded by the Income-tax Appellate Tribunal that one Smt. Janak Rani was a partner of the assessee-firm and that the firm was a genuine firm, this court quashed the criminal proceeding initiated against her for filing false returns.* [2004] 265 ITR 562 (SC).** [1997] 224 ITR 687 (SC).*** [1982] 133 ITR 909 (SC). 51. The first two decisions admittedly arose from the Income-tax Act. It is not demonstrated before us whether identical provisions, namely, sections 50, 51 and 56 of the FERA are available in the Income-tax Act. Even otherwise, in the light of the language used in section 56(1) of the FERA, there cannot be any bar irrespective of the decision under section 50, which I will elaborate in the succeeding paragraphs. The third decision relied on by the appellant relates to power of the court under section 482 of the Code for qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution of India and for writ of prohibition restraining the authorities under the FERA from proceeding with the proposed adjudication and the proposed prosecution, in terms of the Act. In another writ petition which was filed by the officers of the bank as C.W.P. No. 2377 of 1996 challenging the individual notices, the High Court of Bombay rejected the challenge to the constitutional validity of sections 50, 51, 56 and 68 of the FERA, but clarified that section 68(1) of the FERA was not applicable to an adjudication proceeding and that it was confined to a prosecution for penal offences under the Act. Being aggrieved, the appellant-bank and its officers as well as the Union of India have filed civil appeals before this court. Initially, those appeals came up before a Bench of two learned judges which referred the same to a Bench of three judges by order dated April 20, 2004. The three-judge Bench doubted the correctness of a decision relied on by the bank and its officers in Asst. Commissioner v. Velliappa Textiles Ltd. [2003] 11 SCC 405* which was a judgment of a Bench of three judges and by order dated July 16, 2004 (ANZ Grindlays Bank Ltd. v. Directorate of Enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It is submitted that the adjudication proceedings would give an idea to the authorities under the Act as to the gravity of the violation and the opportunity to decide whether the contravention deserved also a punishment by way of prosecution. They would decide whether the penalty imposed under section 50 of the Act is adequate or not. If in the adjudication proceedings it is found that the alleged offender has not infringed any of the provisions of the Act, there will be no occasion for the Directorate of Enforcement to prosecute the person concerned. It would then be incongruous and unreasonable for the Directorate of Enforcement to prosecute a person for violating the FERA, when in the adjudication proceedings against him, it had been found that the person had not violated any of the provisions of the FERA. It was in this context that the scheme of the FERA should be understood as indicating that there should first be an adjudication and thereafter, if the Directorate of Enforcement feels that the penalty is inadequate, to consider the launching of a prosecution. 21. The learned Additional Solicitor General contended that under FERA, adjudication and prosecution are two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd substance in the contention of the learned Additional Solicitor General that the Act subserves a twin purpose. One, to ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after an adjudication under section 51 of the Act and two, to ensure that the tendency to violate is curbed by imposing an appropriate punishment after a due prosecution in terms of section 56 of the Act. The contention that as a matter of construction-since the provisions could not be attacked as violative of the rights under Part III of the Constitution-we should interpret the provisions of the Act and hold that an adjudication has to precede a prosecution cannot be accepted as we see nothing in the provisions of the Act justifying such a * [1963] 33 Comp Cas 231 (SC).construction. On the scheme of the Act, the two proceedings are seen to be independent and the launching of the one or the other or both is seen to be controlled by the respective provisions themselves. In the context of the inclusion of this Act in the Ninth Schedule, the reliance placed on the decision in Rayala Corporation (P) Ltd. v. Director of Enforcement* cannot enable this court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Andhra Pradesh High Court in Anilkumar Aggarwal v. K. C. Basu [2003] Crl. LJ 2197 which also take the same view as the one taken by the Full Bench in the judgment under challenge. The court has also derived support for its view from the decisions of this court in Asst. Collector of Customs v. L. R. Melwani, AIR 1970 SC 962 and in P.Jayappan v. S. K. Perumal* . We see no reason not to approve the answer given by the Full Bench to the question referred to it for decision. On the whole, we are satisfied that there is no justification in accepting the argument that unless an adjudication proceeding under section 51 of the Act is completed, a prosecution under section 56 of FERA cannot be initiated. Both proceedings can simultaneously be launched and can simultaneously be pursued. 24. Counsel submitted that the devising of a special machinery for adjudication, the limiting of the `without prejudice' clause in section 56 to any award of penalty and not the initiation of proceedings under section 51 of the Act, the making of a contravention of any of the provisions of this Act as the key to both proceedings, would all indicate that an adjudication should precede a prosecution under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the effect of the decision of the civil court on the criminal proceedings and initiation of civil and criminal proceedings against the same person belonging to the same cause. The following discussion and conclusion are relevant : "30. What emerges from the aforesaid discussion is.-(1) the previous judgment which is final can be relied upon as provided under sections 40 to 43 of the Evidence Act ; (2) in civil suits between the same parties, principle of res judicata may apply ; (3) in a criminal case, section 300 CrPC makes provision that once a person is convicted or acquitted, he may not be tried again for the same offence if the conditions mentioned therein are satisfied ; (4) if the criminal case and the civil proceedings are for the same cause, judgment of the civil court would be relevant if conditions of any of sections 40 to 43 are satisfied, but it cannot be said that the same would be conclusive except as provided in section 41. Section 41 provides which judgment would be conclusive proof of what is stated therein. 31. Further, the judgment, order or decree passed in a previous civil proceeding, if relevant, as provided under sections 40 and 42 or other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods into India and in pursuance of that conspiracy they had smuggled several items of foreign goods in the years 1959 and 1960. In that connection, an enquiry was held by the Customs authorities. In the course of the enquiry, some of the goods said to have been smuggled were seized. After the close of the enquiry those goods were ordered to be confiscated. In addition, penalty was imposed on some of the accused. Thereafter, on February 19, 1965, the Assistant Collector of Customs, Bombay after obtaining the required sanction of the Government filed a complaint against five persons including the appellants in Criminal Appeal No. 35 of 1967 (accused Nos. 1 and 2 in the case) under section 120B, I. P. C. read with clauses (37), (75), (76) and (81) of section 167 of the Sea Customs Act, 1878 (Act VIII of 1878) as well as under section 5 of the Imports and Exports (Control) Act, 1947. Before the commencement of the enquiry in that complaint, the first accused filed the application mentioned above on August 3, 1965. In the enquiry held by the Collector of Customs, he gave the benefit of doubt to accused Nos. 1 and 2. This is what he stated therein: "As regards M/s. Larmel Enterprises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, as both the cases have to be decided on the basis of the evidence adduced therein. While examining a similar contention in an appeal against an order directing filing of a complaint under section 476 of the old Code, the following observations made by a Constitution Bench in M. S. Sheriff v. State of Madras, AIR 1954 SC 397 give a complete answer to the problem posed : (AIR p. 399, paras 15-16) 15. As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard-and-fast rule can be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of one court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant consideration here is the likelihood of embarrassment. 16. Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is guarded by imposing appropriate punishment after due transaction in terms of section 56 of the Act. In fact, it is relevant to point out that section 23D of the Foreign Exchange Regulation Act, 1947, had a proviso, which indicates that the adjudication for the imposition of penalty should precede making of complaint in writing to the court concerned for prosecuting the offender. The absence of a similar proviso to section 51 or to section 56 of the present 1973 Act is a clear indication that the Legislature intended to treat the two proceedings as independent of each other. There is nothing in the present Act to indicate that a finding in adjudication is binding on the court in a prosecution under section 56 of the Act or that the prosecution under section 56 depends upon the result of adjudication under section 51 of the Act. It is reiterated that the two proceedings are independent and irrespective of the outcome of the decision under section 50, there cannot be any bar in initiating prosecution under section 56. The scheme of the Act makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. No doubt, the conclusion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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