2003 (2) TMI 327 - HC - Companies Law

Summary

Issues:
1. Prosecution under section 56 of the Foreign Exchange Regulation Act, 1973.
2. Interpretation of the relationship between adjudicatory proceedings under section 51 and prosecution under section 56.
3. Discharge of the accused under section 245 Cr. P.C.
4. Legal principles governing discharge of accused under section 245 Cr. P.C.
5. Applicability of judgments from the Supreme Court and High Courts in similar cases.
6. Independence of prosecution under section 56 from adjudicatory proceedings under section 51.

Issue 1: Prosecution under section 56 of the Act
The petitioner sought discharge from prosecution under section 56 of the Foreign Exchange Regulation Act, 1973. The Enforcement Directorate initiated an enquiry under section 51, which the petitioner argued must conclude with an adverse finding before prosecution under section 56 can proceed. The prosecution contended that section 56 allows for independent criminal proceedings, as highlighted in the Supreme Court case of Jayappan v. S.K. Perumal [1984] Suppl. (2) SCC 724.

Issue 2: Relationship between adjudicatory proceedings under section 51 and prosecution under section 56
The court analyzed the provisions of the Act to determine the interplay between adjudicatory proceedings under section 51 and prosecution under section 56. It clarified that prosecution under section 56 is distinct from proceedings before an adjudicating officer under section 51. The court emphasized that the pendency of adjudication proceedings does not bar the institution of criminal proceedings, citing Supreme Court precedents.

Issue 3: Discharge of the accused under section 245 Cr. P.C.
The petitioner filed an application under section 245 Cr. P.C. seeking discharge from prosecution. The court outlined the limited circumstances under which an accused can be discharged under section 245 Cr. P.C. It noted that evidence was yet to be recorded and the petitioner's contentions did not meet the criteria for discharge as specified in the law.

Issue 4: Legal principles governing discharge of accused under section 245 Cr. P.C.
The court highlighted that a trial court can discharge an accused under section 245 Cr. P.C. only if, after considering the evidence, it finds that no case warranting conviction has been made out. In this case, the court determined that the petitioner's arguments did not align with the conditions for discharge under section 245 Cr. P.C.

Issue 5: Applicability of judgments from the Supreme Court and High Courts in similar cases
The petitioner cited judgments from the Supreme Court, Bombay, and Gujarat High Courts to support their contentions. The court examined these references but ultimately found that the principles established in those cases did not apply directly to the circumstances of the present case.

Issue 6: Independence of prosecution under section 56 from adjudicatory proceedings under section 51
The court reiterated that under the Act, prosecution under section 56 is separate from and additional to adjudicatory proceedings under section 51. It emphasized that the pendency of adjudication proceedings does not preclude the initiation of criminal prosecution, as the two processes serve distinct purposes under the legal framework.

In conclusion, the court dismissed the petitioner's application for discharge, affirming that the trial court had appropriately considered the legal and factual aspects of the case. The judgment clarified the relationship between adjudicatory proceedings and prosecution under the Act, emphasizing the independence of criminal proceedings under section 56.