TMI Blog1984 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the money to him, that subsequently, Cibar collected ₹ 10,000 from him and the balance of ₹ 30,000 was kept in the house and it was that amount which had been seized by the authorities. Adjudication proceedings were initiated against the petitioner and he was issued a show cause notice. The petitioner sent a reply on 5th September, 1979, resiling from his earlier statement and contended that the money seized from the house represented the proceeds of a sale transaction entered into by one K.A. Natesan of India and that the amount genuinely belonged to the said Natesan. The explanation was not accepted by the authorities and the petitioner was summoned for a personal hearing. The petitioner presented himself along with his counsel for the hearing and gave yet another version to the effect that the money actually belonged to him and he had repatriated the money through devious means from Sri Lanka since the Sri Lankan Government had imposed severe restrictions on repatriation of money from that country to India. 3. The Deputy Director, Enforcement Directorate, declined to accept the explanation given by the petitioner and passed an order of adjudication imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector has committed an error in taking the view that the petitioner cannot be adequately dealt with in adjudication proceedings and the interests of justice require his prosecution. He has failed to note that though the proviso to Section 23(1)(d) has been deleted, the principle laid down there still holds good. The Deputy Director ought to have filed the complaint before the completion of the adjudication proceedings, but not later. Consequently, after having imposed a penalty in the adjudication proceedings, he has no right in law to file a criminal complaint. (6) The Deputy Director has not followed uniform standards, but has acted arbitrarily in filing a complaint against the petitioner. In the case of one Amirdham, the Deputy Director has ordered the return of a sum of ₹ 20,000 out of ₹ 70,000 received by him through unauthorised channels and did not launch prosecution. But in the case of the petitioner, the Deputy Director has imposed penalty, confiscated the amount and also launched prosecution and this is in violation of Article 14 of the Constitution. (7) Before filing the criminal complaint, the Deputy Director ought to have issued a show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed a reply affidavit to reiterate his position and the respondent has filed an additional counter-affidavit to re-affirm the stand of the department. 7. Taking up for consideration the various contentions put forth by Mr. Chellaswamy, learned Counsel for the petitioner, the first ground of objection relates to the validity and propriety of the prosecution of the petitioner when the appeal filed by him against the order of adjudication is pending disposal. It was urged that an anomalous situation would develop if the criminal Court found the petitioner guilty under Section 9(1)(b) and convicted him but subsequently the Appellate Board rendered a finding that the petitioner had not contravened Section 9(1)(b) of the Act and therefore, the order of adjudication and the imposition of penalty was not called for. The argument contains a fallacy in it, because the power to adjudicate under Section 51 of the Act and the right to prosecute a person before the criminal Court under Section 56 of the Act are independent and not inter-dependent. A reading of the two sections will bring out this position very clearly. Section 56 begins with the following words: Without prejudice to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never intended to act as a bar to any prosecution that might be permissible after the award of confiscation, penalty or increased rate of duty. 11. In the light of the ratio contained in these decisions, and in view of the clear terms of Sections 51 and 56 of the Act, there is no scope whatever for the petitioner to contend that the criminal prosecution is dependent upon the outcome of the adjudication proceedings and as such, the respondent was not competent to file the criminal complaint when the appeal against the order of adjudication is pending disposal. 12. The second proposition put forward by the petitioner is that a cotravention of Section 9(1)(b) of the Act has not been made a specific offence under the Act and as such, there cannot be a prosecution for an offence under Section 9(1)(b). In the words of the counsel, the enforcement authorities can launch prosecutions only for offences under Sections 44 and 58 of the Act, but not for contravention of any other provision of the Act. The contention runs totally counter to the words found in Section 56 which have already been extracted. Sections 44 and 58 deal with specific offences which are likely to be committed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment of India and the Government granted certain exemptions to relax the rules regulating repatriation of funds to India from Sri Lanka, but in spite of that, the Deputy Director had not taken a sympathetic view, but had launched a criminal prosecution against the petitioner. So far as this argument is concerned, the stand of the department is that the exemptions and relaxations of rules granted by the Government of India came into force from a subsequent period and furthermore, the relaxations were made only for purposes of income-tax assessments and not to waive the restrictions contained under the Act. On a perusal of the communication relied on by the petitioner, I find that it has been issued by the Central Board of Direct Taxes to all the Commissioners of Income-tax. The communication refers to assessees bringing to India sums of money from Sri Lanka. They have been divided into two categories, viz., assessees who bring sums of money within a ceiling of ₹ 50,000 and those bringing money in excess of the ceiling. The communication leaves no room for doubt that it was only intended to help income-tax assessees to explain the source of money shown in their account boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the adjudication proceedings taken against an offender, will depend upon the facts of each case and the matter cannot be decided with reference to the delinquent acts of some other person. There is, therefore, no merit in the contention that the petitioner has been unjustly singled out for criminal prosecution. 18. We are only now left with the last ground of objection raised by the petitioner. According to Mr. Chellaswamy, the Deputy Director should have issued a show cause notice to the petitioner before he filed the complaint and the failure to send such a notice is fatal to the prosecution. For advancing such an argument, the learned Counsel placed reliance on the proviso to Section 61(2). Section 61 deals with the taking of cognizance of offences by Magistrates and their power to pass a sentence of imprisonment for a term exceeding two years or fine exceeding two thousand rupees, on any person convicted of an offence punishable under Section 56. Sub-clause (i) of Sub-section (2) of Section 61 imposes certain restrictions on the Court taking cognizance of offences under Section 44(2) and Section 58(1) against officers of the department. Sub-clause (ii) of Sub-section (2) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a criminal prosecution is launched against him under Section 56 of the Act. I find no basis in the proviso for holding that such a notice should be given. All that the proviso states is that before a Court takes cognizance of an offence which relates to the contravention of any provision of the Act which prohibits the doing of an act without permission, the complainant must have given an opportunity to the accused to show cause that he had such a permission. What follows from this is that at some point of time prior to the filing of the complaint, the accused must have been given an opportunity to show that he had obtained the requisite permission and he had not contravened the provisions of the Act in any manner. It is, however, not necessary that the show cause notice must have been issued immediately before the filing of the complaint. If a show cause notice had been issued before adjudication proceedings were started, it would undoubtedly constitute a valid notice under the proviso to Section 51(2). I have already held that a criminal prosecution is not a continuation of the adjudication proceedings. As such, a prosecution cannot amount to a second stage of the proceedings warr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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