2012 (5) TMI 387 - HC - FEMA

FEMA allegations against the respondent are that on 30-8-1996 the appellant herein had served summons on the respondent through his counsel under section 40 of the Foreign Exchange Regulation Act, 1973 ( the Act ) requiring him to appear - summons were served at 8.35 P.M. by the appellant on the respondent who was in Jail No. 2 through his counsel who made an endorsement on the summons that the respondent would appear on 31-8-1996 at 2.00 P.M. It is alleged that the respondent neither appeared on 30-8-1996 nor on 31-8-1996, this led to filing of a complaint under section 56 of the Act against the respondent Held that - before a person can be held to be guilty of disobeying the summons, the summons must be served on him and he must have wilfully disobeyed the summons with a view to hamper the investigation or not to produce the document. possibility of the respondent being in Jail is reflected by the endorsement of the counsel, who mentions Jail No. 2 on his endorsement which prima facie can be taken to show that at the relevant time the respondent was in Jail. petition is dismissed

Summary

Issues:
Appeal against acquittal under section 378 Cr. P.C. - Alleged offence under section 56 of the Foreign Exchange Regulation Act, 1973 - Service of summons on respondent through counsel - Failure to appear - Legal interpretation of summons timing and respondent's release from jail.

Analysis:
The judgment deals with an appeal against the acquittal of the respondent under section 56 of the Foreign Exchange Regulation Act, 1973. The appellant had alleged that the respondent wilfully disobeyed summons served through his counsel, leading to the complaint. The ACMM acquitted the respondent, citing reasons such as the impracticality of expecting the respondent to appear at 9.00 P.M. when served at 8.35 P.M. near the Central Jail, and the respondent's recent release after 90 days in jail. The ACMM also noted the absence of a specific direction for appearance on the subsequent date, 31-8-1996, considering the circumstances. The appellant argued that the respondent's actions constituted an offence under section 56. However, the High Court found no infirmity in the ACMM's judgment, emphasizing the importance of proper summons service and the respondent's situation upon release from jail. The court highlighted that the summons timing and the respondent's mental state post-release were crucial factors in determining his failure to appear.

The High Court analyzed the relevant legal provisions under section 40 and section 56 of the Act. Section 40 empowers Enforcement Officers to summon individuals for evidence or document production during investigations. Section 56 outlines offences and penalties, including repeated offences. The Court emphasized that for a person to be guilty of disobeying summons under section 56, proper service of summons and wilful disobedience are essential. In this case, the summons were not served directly on the respondent, creating a procedural flaw. Even if service through counsel is considered valid, the timing discrepancy between summons issuance and the respondent's release from jail was crucial. The Court agreed with the ACMM's reasoning that expecting the respondent to appear immediately post-release was unreasonable, given the distance to the office and the mental state of a recently released individual. The Court also noted that the respondent's failure to appear on the subsequent date, while important, did not warrant prosecution under section 56 without a clear directive for appearance.

In conclusion, the High Court dismissed the appeal, upholding the ACMM's acquittal of the respondent. The Court found no legal basis to interfere with the lower court's decision, emphasizing the importance of proper summons service, timing considerations, and the respondent's circumstances post-release from jail. The Court distinguished this case from precedent where refusal to accept summons directly occurred, reinforcing the unique circumstances of this matter.