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2015 (5) TMI 1033 - JHARKHAND HIGH COURT

2015 (5) TMI 1033 - JHARKHAND HIGH COURT - 2016 (333) E.L.T. 17 (Jhar.) - Nature of offences - whether Offences, punishment of which extend to seven years, under the Foreign Exchange Regulation Act, 1973 FERA) being noncognizable in terms of Section 62 of the Act, are bailable or nonbailable? - Held that:- Under FERA the power in terms of Section 45 of the FERA though has been given to police officer and other officer to make search and arrest when warrant but no provision is there that if arres .....

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ection (3) of Section 35 will have same power as that of the officerincharge of the police station. That apart, no such provision is there which does speak about the compounding of the offence as is there under the Central Excise Act and Custom Act.

Under the circumstances, the offences under the Foreign Exchange Regulation Act, 1973 punishment of which extend to a period of seven years, cannot be taken to be bailable, rather in terms of the provision as referred to above and also in .....

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Section 62 of the Act, are bailable or nonbailable? 2. Before adverting to the submissions, advanced on behalf of the parties, the facts giving rise to this case, needs to be taken notice of. 3. The case seems to be offshoot of fodder scam cases, which, under the direction of the Patna High Court as well as under the direction of Hon'ble Supreme Court, had been lodged against the number of accused persons including the father of this petitioner namely Dr. K.M.Prasad, wherein allegations had .....

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me of his sons and daughters including the petitioner being the son of Dr. K.M.Prasad. Further, it had been found that Dr. K.M.Prasad had received foreign exchange remittances by way of foreign exchange instruments amounting to 3,15,000/US Dollar and 1000/Pounds during the year 199192 and those transactions were not genuine gift, rather it were in violation of the provision of Foreign Exchange Regulation Act, 1973 (in short FERA). During investigation, it also transpired that the petitioner had .....

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he Foreign Exchange Management Act, 1999, was taken against the accused persons including this petitioner. Thereupon, warrant of arrest was issued against the petitioner. 5. Earlier the entire criminal proceedings of the said case was challenged before this Court in W.P.(Cr.) No. 85 of 2003, which was dismissed on 19/07/2012. 6. According to the petitioner, since nonbailable warrant of arrest has been issued taking the offences to be nonbailable, necessity arose to file this application for decl .....

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untry and the proper utilization thereof in the interest of the economic development of the Country and, thereby, the main object of the legislature is to have proper regulation of the foreign exchange. Though the provision is there also for prosecution but that appears to be a secondary object of the legislature and, as such, the offences in terms of the provisions as contained in Section 62 of FERA Act, has been made noncognizable though punishment for some of the offences in terms of the prov .....

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y that the offence punishable for more than seven years would be cognizable and nonbailable. But, so far provision of FERA is concerned, the offences have been made noncognizable, but the act is silent as to whether it is bailable or nonbailable. 8. Same issue did crop up before the Hon'ble Supreme Court in a case of Om Prakash & OthersversusUnion of India & Others [(2011) 14 SCC 1] as to whether offences under the Custom Act, 1962 and Central Excise Act, 1944, being noncognizable, a .....

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Criminal Procedure, were pleased to hold that the punishment though has been prescribed under the Excise Act up to seven years but those have been intended by the legislature to be bailable. On similar analogy, Their Lordships have also held the offences under the Custom Act to be bailable. While holding so, one of the considerations was there that the legislature have made offence under both the Acts, noncognizable. 9. Similar is the situation here as has been stated above that some of the off .....

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r nonbailable. In absence of such provision being there, the issue would be governed by the provisions of the Code of Criminial Procedure. Section 2 (A) defines 'bailable offence', which offence as per said Section, is shown in the First Schedule as bailable or which is made bailable by any other law for the time being in force whereas 'nonbailable' offence means any other offence. The Second Part of the Schedule I is with respect to the offences other than IPC, being cognizable .....

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rs (supra), would not be applicable in this case as the provisions either under the Central Excise Act, 1944 or Custom Act, 1962, are not in paramateria of the provision as is there under the FERA, rather the provisions relating to arrest, powers of the police or the authority are quite different and, thereby, the decision rendered in the case of Om Prakash & Others (Supra), would not be applicable. 11. Thus, the contention, which has been made on behalf of the petitioner in reference to the .....

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Supreme Court in a case of Om Prakash & Others) (Supra). 12. On the other hand, submissions are there that the decision, referred to above, is not applicable as the provisions, on the basis of which the offences under those Acts have been held to be bailable, are not similar. 13. In that event, one before coming to any conclusion, needs to take relevant provisions of the Central Excise Act, 1944 and also the provisions under the FERA Act. Relevant provisions would be Section 9(a), 13, 18, 19 .....

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Central Government, of [such compounding amount and in such manner of compounding] as may be prescribed. Provided that nothing contained in this subsection shall apply to (a) a person who has been allowed to compound once in respect of any of the offences under the provisions of clause (a), (b), (bb), (bbb), (bbbb) or (c) of subsection (1) of Section 9; (b) a person who has been accused of committing an offence under this ACt which is also an offence under the Narcotic Drugs and Psyichotropic S .....

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to be liable to punishment under this Act or the rules made thereunder. 18. Searches and arrests how to be made. - All searches made under this Act or any rules made thereunder and all arrests made under this Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating respectively to searches and arrests made under that Code. 19. Disposal of persons arrested. - Every person arrested under this Act shall be forwarded without delay to t .....

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stody to such Magistrate. 21. Inquiry how to be made by Central Excise Officers against arrested persons forwarded to them under section 19. - (1) When any person is forwarded under section 19 to a Central Excise Officer empowered to send persons so arrested to a Magistrate, the Central Excise Officer shall proceed to inquire into the charge against him. (2) For this purpose the Central Excise Officer may exercise the same powers and shall be subject to the same provisions as the officerincharge .....

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at there is not sufficient evidence or reasonable ground of suspicion against the accused person, he shall release the accused person on his executing a bond, with or without sureties as the Central Excise Officer may direct, to appear, if and when so required before the Magistrate having jurisdiction, and shall make a full report of all the particulars of the case to his official superior. 14. Thus, I do find that Section 9(A) of the Central Excise Act, 1944 does prescribe for compounding of th .....

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of the Code of Criminal Procedure such as Section 2(a) speaking about the bailable offence, 2(c) defining a cognizable offence; 2(l) defining noncognizable offence and also the provisions of Section 155 of the Code of Criminal Procedure, were pleased to hold the offences under the Excise Act being bailable after observing as follows: 28. Having considered the various provisions of the Central Excise Act, 1944 and the Code of Criminal Procedure, which have been made applicable to the 1944 Act, w .....

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1944 Act deals with levy and collection of duty and offences under the said Act have been specified in Section 9, which provides that whoever commits any of the offences set out in Section 9, would be punishable in the manner indicated under Subsection 91) itself. What is even more significant is that Section 20 of the 1944 Act, which has been extracted hereinabove, provides that the OfficerinCharge of a police station to whom any person is forwarded under Section 19, shall (emphasis supplied) .....

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eal mainly with powers of arrest under the Customs Act. The only cited decision which deals with the provisions of the Central Excise Act is the decision of the Division Bench of the Punjab & Haryana High Court in the case of Sunil Gupta Vs. Union of India. In the said case also, the emphasis is on search and arrest and the learned Judges in paragraph 22 of the judgment specifically indicated that the basic issue before the Bench was whether arrest without warrant was barred under the provis .....

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isions of the 1944 /act, which indicate the offences under the said Act are bailable in nature. 16. Now, it is to be considered whether similar provisions are there under the Foreign Exchange Regulation Act, 1973, so as to come to the conclusion that the offences under the said Act, are bailable. 17. In this regard, one may take notice of the provisions as contained in Sections 35, 45, 56 and 62 of the said Act, which reads as follows: 35. Power to arrest( 1) If any officer of Enforcement author .....

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(1), he shall, for the purpose of releasing such person on bail or otherwise, have the same powers and be subject to the same provisions as the officerincharge of a police station has, and is subject to, under the 1[Code of Criminal Procedure, 1973 (2 of 1974)]. 45 Power of police officer and other officers to enter, search, etc.( 1) Notwithstanding anything contained in the 1[Code of Criminal Procedure, 1973 (2 of 1974), any police officer not below the rank of a Deputy Superintendent] of Polic .....

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otel, any shop or any other place intended for use by, or accessible to the public. (2) Where any person is arrested under subsection (1) by an officer other than a police officer, such officer shall, without unnecessary delay, take or send the person arrested before a magistrate having jurisdiction in the case or before the officerincharge of a police station. (3). The provisions of the 2[Code of Criminal Procedure, 1973 (2 of 1974)] shall, subject to the provisions of this section, apply, so f .....

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ause (a) of subsection (1) of section 19, subsection (2) of section 44 and sections 57 and 58], or of any rule, direction or order made thereunder he shall, upon conviction by a court, be punishable,- (i) in the case of an offence the amount or value involved in which exceeds one lakh of rupees, with imprisonment for a term which shall not be less than six months, but which may extend to seven years and with fine: Provided that the court may, for any adequate and special reasons to be mentioned .....

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nder this Act [not being an offence under section 13 or clause (a) of subsection (1) of 1[section 18 or section 18A] or clause (a) of subsection (1) of section 19 or subsection (2) of section 44 or section 57 or section 58], he shall be punishable for the second and for every subsequent offence with imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine: Provided that the court may, for any adequate and special reasons to be mentioned in .....

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r section 18A] or clause (a) of subsection (1) of section 19 or subsection (2) of section 44 or section 57 or section 58], the court by which such person is convicted may, in addition to any sentence which may be imposed on him under this section, by order, direct that that person shall not carry on such business as the court may specify, being a business which is likely to facilitate the commission of such offence for such period not exceeding three years, as may be specified by the court in th .....

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be confiscated or any other penal action has been taken against him for the same offence; (iii)the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party in the commission of the offence; (iv) the age of the accused. (5) For the purposes of subsections (1) and (2), the fact that an offence under this Act has caused no substantial harm to the general public or to any individual shall be an adequate and special reason fo .....

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