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2017 (8) TMI 574 - SC - FEMADisobedience to respond to the summons issued under Section 40(3) FERA - offence under Section 56 of FERA, 1973 - Held that - This point has come up for consideration before this Court in Enforcement Director and Anr. v. M.Samba Siva Rao and Ors. (2000 (5) TMI 586 - SUPREME COURT OF INDIA). Due to the divergence of opinion of the High Courts of Kerala, Madras on one hand and High Court of Andhra Pradesh on the other, a three Judge Bench of this Court considered the matter and held as clauses (i) and (ii) of Section 56(1) are material for deciding the quantum of punishment and further, there is no reason why the expression in any other case in Section 56(1)(ii) should be given any restrictive meaning to the effect that it must be in relation to the money value involved, as has been done by the Kerala High Court. The summons issued under Section 40, if not obeyed, must be held to be a contravention of the provisions of the Act and at any rate, a contravention of a direction issued under the Act, and therefore, such contravention would squarely come within the ambit of Section 56 of the Act. The question of service under Section 40(3) of FERA, 1973 not being effected on the Respondent is irrelevant at this point of time as he was represented by an Advocate before the Trial Court. It appears that the Respondent is not interested in these proceedings. In any event, the judgment of the High Court cannot be sustained as it is contrary to the law laid down by this Court in Enforcement Director and Anr. v. M. Samba Siva Rao and Ors. (supra).
Issues:
1. Validity of summons service under Section 65 of Cr. P.C. 2. Alleged contravention of FERA 1973 by disobedience to summons. 3. Interpretation of Section 56(1) of FERA 1973 regarding contravention. Issue 1: Validity of summons service under Section 65 of Cr. P.C. The judgment pertains to appeals against a Criminal Appeal and a Criminal Revision Petition from the High Court of Karnataka. The Supreme Court directed the Appellant to serve the Respondent through the Special Court (Economic Offences), Bangalore, as the Respondent was not available at the address. The Special Court affixed the summons on the door of the Respondent's house, deeming him served. The Respondent did not appear for the case, and the Assistant Director, Enforcement Directorate, filed a complaint against the Respondent and others under FERA 1973 for releasing foreign exchange in contravention of the law. Issue 2: Alleged contravention of FERA 1973 by disobedience to summons The Special Court acquitted the Respondent, stating that the summons were not duly served personally. It held that the contravention of Section 40(3) FERA did not arise due to lack of valid service of summons. The High Court upheld this decision, stating that disobedience of summons does not amount to a contravention of FERA. The Supreme Court analyzed the interpretation of Section 56(1) of FERA, citing a previous case, and concluded that failure to obey summons under Section 40(1) FERA constitutes a contravention of the Act. The Respondent's representation by an Advocate was deemed irrelevant, and the High Court's judgment was set aside. Issue 3: Interpretation of Section 56(1) of FERA 1973 regarding contravention The Supreme Court considered the divergence of opinions among High Courts on whether disobedience to summons under FERA amounts to an offence under Section 56. It cited judgments from Kerala, Madras, and Andhra Pradesh High Courts to support its interpretation. The Court held that failure to attend and give a statement in response to summons under FERA constitutes disobeyance of directions, falling under Section 56(1). The judgment of the High Court was overturned based on the legal interpretation provided by the Supreme Court in previous cases, setting aside the High Court's decision and allowing the appeals.
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