TMI Blog1973 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1966, the rupee was devalued. On May 24, 1971 the, petitioner was served with summons under S. 19-F of the Foreign Exchange (Regulation) Act, 1947-hereinafter referred to as the Exchange Act to give evidence in the enquiry which Shri D. K. Guha, Deputy Director, Enforcement Directorate, was making into certain offences under the Exchange Act. The petitioner was examined on June 3, 1971, June 16, 1971 and June 17, 1971. According to the petitioner, the entire examination on the said dates related to the booking by the United Commercial Bank of the aforesaid forward exchange contract dated June 4, 1966. On August 31, 1971, the petitioner was arrested under's. 19B of the Exchange Act. Sub-section (1) of S. 19B provides that if any officer of Enforcement.. . . . has reason to believe that any person in India or within the Indian customs waters has been guilty of an offence punishable under the Exchange Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. Sub-section (2) provides that every person arrested under sub-section ( 1) shall, without unnecessary delay, be taken to a Magistrate. Sub-s. (3) empowered an officer of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Personnel, Cabinet Secretariat, Government of India, being an officer of Enforcement authorised by the Central Government to exercise the powers under, Section 19B of the said Act, have reason to believe that the said R. B. Shah in India has been guilty of offences under Section 4(2) and under Section 22 of the said Act punishable under Section 23 of the said Act; 40.NOW, THEREFORE, I arrest the said R. B. Shah on the grounds stated herein above, today the 31st, August, 1971 at 10.35 a.m. under Section 19E(1) of the Foreign Exchange Regulation Act, 1947. The question arises, with which we will presently deal with, whether after those grounds have been served on the petitioner, it could be said that he was a person accused of an offence within art. 20(3) of the Constitution. The petitioner was produced before the Chief Presidency Magistrate, Calcutta, on August 31, 1971, who released him on bail of ₹ 10,000 with the direction that the petitioner should contact the Investigating Officer every alternate day during the next two weeks and thereafter as and when called for. On September 6, 1971, the Chief Presidency Magistrate, Calcutta, recorded : Both accused are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the accused are given as the Management and other officers of the United Commercial Bank and the Management and officers: of the Hindusthan Motors Ltd. On April 17, 1972 another summons was issued, to the peti- tioner under s. 19-F of the Exchange Act to appear before, the Deputy Director, Enforcement Directorate, on April 28, 1972 to give evidence relating to the transaction of exchange contract booked from Hindusthan Motors Ltd. on June 4,1966. The petitioner wrote to the Deputy Director submitting that the summons was violative of art. 20(3) of the Constitution. In this connection he submitted as follows I remind you that after examining on the 3rd June, 1971, 16th June. 1971 and 17th June 1971 proceedings have been initiated and I was arrested on the 3 1st August, 1971 and in the grounds of arrest one of the grounds of accusation mentioned is the transaction referred 'to by you in the summons. The petitioner requested the Deputy Director to withdraw the summons........ On April 22, 1972 the Deputy Director informed the petitioner that the contentions had no substance at all. He further informed the petitioner that the summons issued on April 17, 1972 could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd imposing penalities. At that stage there is no question of the offender against the Customs Act being charged before a Magistrate. Ordinarily after adjuding penalty and confiscation of goods or without doing so, if the Customs officer forms an opinion that the offender should be prosecuted he may prefer a complaint in the manner provided under s. 137 with the sanction of the Collector of Customs and until a complaint is so filed the person against whom an inquiry is commenced under the Customs Act does not stand in the character of a person accused of an offence under s. 135. The learned counsel for the petitioner, however, contends that the facts here are different. He says that under the Exchange Act the position is slightly different. He further says that in Romesh Mehta's case([1969] 2 S.C.R. 461.) no enquiry had been made while in the present case an enquiry under s. 19F had been made and the Deputy Director had come to a definite conclusion that the petitioner was guilty of an offence. He further says that the next step would be an enquiry under s. 23 of the Exchange Act which might result in a penalty under s. 23(1)(a) or the case being sent to a Court for trial. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah, J., after reviewing a number of authorities, observed at p. 472 : Normally a person stands in the character of an ,accused when a First Information Report is lodged against him in respect of an offence before an Officer competent to Investigate it, or when a complaint is made relating to the commission of an offence before a Magistrate competent to try or send to another Magistrate for trial of the offence. The Additional Solicitor General says that the petitioner had not been specifically named as accused in the First Information Report and, therefore, he is not entitled to the protection under Art. 20(3). We are unable to agree with him in this respect. The petitioner was the General Manager of the United Commercial Bank and it was alleged in the grounds of arrest that the petitioner was in charge of, or was responsible to the United Commercial Bank Ltd. for the conduct of the business of the said Bank, and that he failed to prove in course of his statements made under S. 19F before Shri D. K. Guha, Deputy Director of Enforcement, that the contravention took place without his knowledge or that he exercised all due diligence to prevent the aforesaid contravention, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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