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2009 (3) TMI 570 - HC - Companies LawRestrictions on dealing in foreign exchange - complaint under section 8(1) of the Foreign Exchange Regulation Act, 1973 (FERA) - Held that - This Court is of the view that the pendency of the two criminal complaints against the petitioners who are 79 and 80 years old respectively and in particular where not even the arguments on charge have been heard for 22 years, will not serve the interests of justice. Accordingly, Complaint Cases titled J.C. Makhija Assistant Director, Enforcement Directorate v. S.K. Bahadur and J.C. Makhija Assistant Director, Enforcement Directorate v. Asha Bhatnagar both pending in the court of learned ACMM, New Delhi under section 8(1) of the Foreign Exchange Regulation Act, 1973 and all proceedings consequent thereto hereby stand quashed. It is further made clear that the order passed in this petition will not affect the decision in the appeal (arising from the adjudication proceedings) pending before the Appellate Tribunal or the criminal proceedings under the PC Act, 1947. This order has been passed in the peculiar facts of the present cases.
Issues Involved:
1. Quashing of Complaint Cases under Section 8(1) of the Foreign Exchange Regulation Act, 1973 (FERA). 2. Delay in the prosecution and its impact on the right to a speedy trial. 3. Applicability of departmental circulars and guidelines regarding the prosecution threshold. 4. Impact of ongoing parallel proceedings under the Prevention of Corruption Act, 1947 (PC Act). Detailed Analysis: 1. Quashing of Complaint Cases under Section 8(1) FERA: The petitioners sought the quashing of complaint cases filed under Section 8(1) FERA, which prohibits the acquisition of foreign exchange without special permission from the Reserve Bank of India (RBI). The complaints were based on a search conducted by the Central Bureau of Investigation (CBI) on 4-12-1984, which resulted in the seizure of foreign currency and incriminating documents. The petitioners were alleged to have acquired foreign currency in contravention of FERA provisions, leading to the filing of complaints under Section 56 FERA. 2. Delay in Prosecution and Right to a Speedy Trial: The petitioners argued that despite the complaints being filed in 1987, charges had not been framed even after 22 years. The court noted that the petitioners were elderly (79 and 80 years old) and that the prolonged delay violated their right to a speedy trial under Articles 14 and 21 of the Constitution. The court emphasized that a period of 22 years without framing charges could not be considered reasonable, especially given the nature of the offences and the likely maximum punishment. 3. Applicability of Departmental Circulars and Guidelines: The petitioners relied on departmental circulars which set monetary limits for launching prosecutions under FERA. Circulars dated 5-2-1987 and 5-5-1992 suggested that prosecution should only be considered if the value of seized foreign exchange was substantial (initially Rs. 25,000, later raised to Rs. 2.5 lakhs). The court noted that the seized foreign exchange in this case was Rs. 49,452, which was below the threshold set by the circulars. The court found that the Central Government and the Directorate of Enforcement had not adequately considered these guidelines when deciding to continue the prosecution. 4. Impact of Ongoing Parallel Proceedings under the PC Act: The court acknowledged that the petitioners were also facing trial under the PC Act for possessing assets disproportionate to known sources of income, including the seized foreign currency. However, it held that the continuation of the FERA prosecution would not serve any purpose, given the prolonged delay and the small amount involved. The court clarified that quashing the FERA complaints would not affect the ongoing adjudication proceedings or the criminal trial under the PC Act. Conclusion: The court concluded that the prolonged delay in prosecuting the FERA complaints, coupled with the petitioners' advanced age and the small amount of foreign exchange involved, justified quashing the complaints. It held that continuing the prosecution would not serve the interests of justice and would violate the petitioners' right to a speedy trial. Therefore, the court quashed the complaint cases under Section 8(1) FERA and all consequent proceedings. The decision did not affect the ongoing adjudication proceedings or the criminal trial under the PC Act. The petitions were allowed with no order as to costs.
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