1998 (6) TMI 490 - HC - Companies Law

Summary

Issues Involved:
1. Admissibility of statements recorded without caution under Section 164(2) of the Criminal Procedure Code.
2. Legal status of a person summoned under Section 40 of the Foreign Exchange Regulation Act (FERA).
3. Applicability of precedents and analogous provisions from other Acts.

Detailed Analysis:

1. Admissibility of Statements Recorded Without Caution:
The trial court held that the statements recorded by PW-1 were inadmissible because no caution was administered as required under Section 164(2) of the Criminal Procedure Code. The complainant argued that the person summoned under Section 40 of the FERA is not an accused at that stage, and therefore, the requirement for caution does not apply. The court referenced multiple Supreme Court decisions, including Poolpandi v. Superintendent, Central Excise, and Ramesh Chandra Mehta v. State of West Bengal, which established that a person summoned for questioning is not an accused and thus, the caution under Section 164(2) is not necessary. The court concluded that the statements recorded under Section 40 of the Act are not confessions recorded by a magistrate and do not require the procedural safeguards of Section 164(2).

2. Legal Status of a Person Summoned Under Section 40 of FERA:
The court examined whether a person summoned under Section 40 of the FERA is considered an accused. It was determined that such a person is not an accused at that stage, as supported by Supreme Court rulings in cases like K.I. Pavunny v. Assistant Collector, Central Excise Collectorate. The court emphasized that the purpose of summoning under Section 40 is to gather information and evidence, not to accuse the individual of a crime at that point. Therefore, the procedural safeguards for accused persons do not apply.

3. Applicability of Precedents and Analogous Provisions:
The court noted that provisions under Section 171A of the Sea Customs Act, Section 108 of the Customs Act, Section 14 of the Central Excises and Salt Act, and Section 40 of the FERA are analogous. The judgment referenced Haroom Haji Abdulla v. State of Maharashtra, where the Supreme Court held that statements recorded under similar provisions are admissible if found to be voluntary, even if not recorded by a magistrate under Section 164. The court also cited other relevant cases, including Badaku Joti Svant v. State of Mysore, which supported the admissibility of statements made to customs officers.

Conclusion:
The court concluded that the trial court's finding that the statements were inadmissible due to the lack of caution was unsustainable in law. The appeal was allowed, the trial court's judgment was set aside, and the matter was remanded for reconsideration of the statements under exhibits P-2 to P-5, taking into account the respondent/accused's contentions and disposing of the matter afresh in accordance with the law.