1997 (10) TMI 402 - HC - Money Laundering

Summary

Issues Involved
1. Right to be accompanied by a lawyer during interrogation.
2. Representation by an authorized agent.
3. Interrogation during office hours with reasonable notice.
4. Quashing of the order denying the presence of a lawyer.

Detailed Analysis

1. Right to be accompanied by a lawyer during interrogation:

The petitioners sought permission to be accompanied by a lawyer during interrogation under Section 40(3) of the Foreign Exchange Regulation Act, 1973 (FERA). The petitioners argued that the wording of Section 40(3) confers a discretion on the authority to allow the presence of a lawyer, which should be exercised adhering to principles of natural justice. They also contended that any ambiguity in the provision should be resolved in favor of the citizen.

On the other hand, the respondents argued that a person summoned under Section 40 of the Act, being only a suspect or a person having information, has no right to be accompanied by a lawyer. The principles of natural justice, according to the respondents, are not applicable in such situations. The respondents further contended that the Supreme Court's decision in Poolpandi v. Superintendent, Central Excise, concluded that a summoned person does not have the right to insist on the presence of a lawyer during interrogation.

The court held that the literal interpretation of Section 40(3) indicates that the discretion to allow the presence of a lawyer lies with the officer. The court emphasized that the principles of natural justice do not apply in this context, as the purpose of the statute is to unearth misappropriated money for the public exchequer. The court also referred to the decision in Poolpandi's case, which held that the presence of a lawyer during interrogation would frustrate the purpose of the inquiry under statutes like the Customs Act and FERA.

2. Representation by an authorized agent:

The petitioners argued that Section 40(3) of FERA allows a person summoned to attend either in person or by an authorized agent, which should include a lawyer. The respondents countered that a lawyer cannot be considered an authorized agent within the meaning of Section 40.

The court noted that the statute specifically provides for representation by an authorized agent in certain contexts, but not in the context of Section 40(3). The court held that the discretion under Section 40(3) does not automatically create a right for the summoned person to be represented by a lawyer. The court further stated that the principles of natural justice are excluded by necessity in this context to ensure effective investigation.

3. Interrogation during office hours with reasonable notice:

The petitioners requested that they be interrogated only during office hours and be given reasonable notice of at least 48 hours. The court noted that the summons issued to the petitioners had already granted more than 48 hours' notice, thus addressing this concern.

4. Quashing of the order denying the presence of a lawyer:

The petitioners sought to quash the order (Annexure-II) that denied their request for the presence of a lawyer during interrogation. They argued that the order did not provide acceptable reasons for rejecting their request and relied on the decision in Mohinder Singh Gill v. The Chief Election Commissioner, which held that reasons for an order cannot be supplemented by fresh reasons in an affidavit.

The court held that the decision in Poolpandi's case is a complete answer to the petitioners' prayer for the presence of a lawyer during interrogation. The court emphasized that the principles of natural justice do not apply in this context and that the discretion under Section 40(3) does not confer a right to the summoned person to insist on the presence of a lawyer.

Conclusion:

The court dismissed the writ petition, holding that the petitioners are not entitled to the prayers sought, including the presence of a lawyer during interrogation, representation by an authorized agent, and quashing of the order denying the presence of a lawyer. The court also dismissed Crim. Appln. No. 132/97, which sought appropriate orders related to the petitioners' interrogation.