2012 (11) TMI 784 - HC - FEMA

Money transactions - whether offence under FEMA is made out or not Held that - Investigation is still at the initial stage, the FIR cannot be quashed at the threshold - allegations in the FIR itself are to the effect that the petitioner is indulging in hawala money transactions remitting the money from foreign country through illegal channels - Court cannot comment on the merits of the case at this stage without there being any clarification and the evidence on of record - no ground is made out at this stage for quashing of the impugned FIR.

Summary

Issues:
Petition to quash FIR under Sections 420, 199, 200, 120-B and Section 82 of the Indian Registration Act; Investigation stage; Allegations of hawala money transactions; Delay in investigation; Reference to FEMA.

Analysis:
The judgment pertains to a petition filed under Section 482 Cr.P.C. seeking to quash FIR No.51 dated 14.2.2012, registered at Police Station Tripri Town, Patiala under Sections 420, 199, 200, 120-B, and Section 82 of the Indian Registration Act. The petitioner's counsel argued that the allegations do not establish a case under the mentioned sections and highlighted a reference to the Foreign Exchange Management Act, 1999 (FEMA) made by the police for clarification on money transactions. The police had written to the Reserve Bank of India seeking clarification on any potential FEMA violations. The court noted that the investigation was ongoing, with a recent letter sent to RBI for clarification on FEMA provisions. The court emphasized that as the investigation was still in its initial stages, it was premature to quash the FIR. The allegations in the FIR suggested the petitioner's involvement in hawala money transactions through illegal channels. The court rejected the argument that the investigation had been closed, stating that clarity would only emerge after the filing of the challan under Section 173 Cr.P.C. The court declined to comment on the case's merits without sufficient evidence on record and dismissed the petition to quash the FIR.

In summary, the court's decision was based on the ongoing investigation stage, the lack of conclusive evidence, and the need for further clarification on the allegations, particularly regarding potential violations of FEMA. The court emphasized that it was premature to quash the FIR as the investigation was still in progress, and the petitioner's grievances did not warrant immediate intervention. The judgment highlighted the importance of allowing the investigation to proceed and evidence to be presented before making any determinations on the case's merits.