2008 (1) TMI 992 - HC - FEMA

Summary

Issues Involved:
1. Quashing of Criminal Complaints No. 262/1/2002 and 841/1/2002.
2. Legality of joint trial for two criminal complaints on the same set of facts.
3. Impact of exoneration in adjudication proceedings on pending criminal proceedings.

Summary:

Issue 1: Quashing of Criminal Complaints No. 262/1/2002 and 841/1/2002
The petitioner sought the quashing of Criminal Complaint No. 262/1/2002 and 841/1/2002 filed by the respondent u/s 56 of FERA and Sections 49(3) and 49(4) of FEMA. The complaints were based on the same set of facts, alleging that the petitioner's firm exported goods to Germany without RBI permission, violating Sections 18(2) and 18(3) FERA. The court noted that the petitioner was exonerated on merits in the adjudication proceedings, and the order had attained finality. Consequently, the continuation of criminal proceedings on identical facts was deemed unsustainable.

Issue 2: Legality of joint trial for two criminal complaints on the same set of facts
The learned ACMM had directed that both criminal complaints be tried jointly. The petitioner argued that for the same alleged offence, two complaints cannot be filed, making a joint trial impermissible. The court observed that since the petitioner was exonerated on merits in the adjudication proceedings, there was no need to decide which of the two complaints could proceed, as neither could validly continue.

Issue 3: Impact of exoneration in adjudication proceedings on pending criminal proceedings
The court referred to the judgment in Sunil Gulati v. RK Vohra, which established that if a person is exonerated on merits in adjudication proceedings, the continuation of criminal proceedings on the same facts is unjust. The court also cited the Supreme Court's decision in PS Rajya v. State of Bihar, emphasizing that exoneration in departmental proceedings, which require a lower standard of proof, should logically lead to the dismissal of criminal proceedings requiring a higher standard of proof. The court concluded that the exoneration of the petitioner on merits rendered the pending criminal proceedings unsustainable.

Conclusion:
The criminal proceedings against the petitioner were quashed, including Criminal Complaints Nos. 262/1/2002 and 841/1/2002, and all consequent proceedings. The petition was allowed with no order as to costs.