2004 (7) TMI 380 - HC - Companies Law

Summary

Issues Involved:
1. Prematurity of Complaint under Section 56 of FERA, 1973
2. Authorization of the Complainant under Section 61(2)(ii)(b) of FERA, 1973

Detailed Analysis:

Issue 1: Prematurity of Complaint under Section 56 of FERA, 1973
- Facts and Allegations: The accused company and its directors were alleged to have failed to secure export proceeds within the stipulated time, contravening Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 (FERA, 1973), and thereby committing an offense punishable under Section 56 of the Act. The complaint was filed before the completion of adjudication proceedings under Section 51 of the Act.

- Legal Argument: The petitioners contended that a complaint under Section 56 is premature if filed before the completion of adjudication proceedings and the imposition of a penalty under Section 50. They argued that the adjudication must first determine whether any contravention occurred.

- Court's Analysis: The Court examined the language of Section 56, which begins with "without prejudice to any award of penalty by the adjudicating officer under this Act." This indicates that criminal prosecution is independent of and in addition to adjudication proceedings. The Court referenced multiple judgments, including those from the Supreme Court and various High Courts, to support the view that criminal prosecution can proceed independently of the outcome of adjudication proceedings.

- Conclusion: The Court concluded that a complaint under Section 56 of FERA, 1973, is not premature if filed before the award of a penalty under Section 50. Criminal prosecution is an independent proceeding that can be initiated during the pendency of adjudication proceedings.

Issue 2: Authorization of the Complainant under Section 61(2)(ii)(b) of FERA, 1973
- Facts and Allegations: The petitioners argued that the complainant, an Enforcement Officer, was not properly authorized to file the complaint. They contended that authorization must be in writing for each individual case, rather than a general authorization.

- Legal Argument: The petitioners argued that the general authorization provided by the notification dated 24-9-1993 was insufficient. They claimed that specific authorization for each case was required under Section 61(2)(ii)(b) of FERA, 1973.

- Court's Analysis: The Court reviewed the notification issued by the Central Government, which authorized certain officers, including Enforcement Officers, to file complaints. The Court noted that Section 61 of the Act allows for both general and special authorizations. The notification in question was deemed sufficient for empowering the Enforcement Officer to lodge the complaint.

- Conclusion: The Court held that the general authorization provided by the notification dated 24-9-1993 was sufficient for lodging complaints in court. No special authorization for each individual case was required.

Summary of Judgment:
- Prematurity of Complaint: The Court concluded that a complaint under Section 56 of FERA, 1973, is not premature if it is instituted before the award of a penalty under Section 50. Criminal prosecution is an independent proceeding that can be initiated during the pendency of adjudication proceedings.

- Authorization of Complainant: The Court held that the complainant was duly authorized to lodge the complaint by virtue of the general authorization in the notification dated 24-9-1993. No special authorization for each individual case was required.

Final Orders:
- The reference was answered accordingly, and the cases were directed to be placed before the concerned courts for further proceedings. The trial courts were instructed to expedite the proceedings. Interim orders previously granted were vacated.