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2024 (7) TMI 191 - HC - FEMAProceedings of FERA against juristic person - proceedings pending before the Metropolitan Magistrate under Sections 56 and 68 of FERA challenged - show cause memorandum is a replica or verbatim/representation of the allegations in the complaint filed in the criminal proceeding which is under challenge - revisional application was initially preferred on the grounds that M/s. ITC Ltd being a juristic person cannot be subjected to any punishment for imprisonment and so cannot be proceeded with under Section 4 of Foreign Exchange Regulation Act, 1973 - criminal complaint against the petitioner according to the complainant/opposite party is based on the statement of Shri N. Lakshminarayan HELD THAT - In the present case adjudicating authority decided the issue relating to the Show Cause on merits, including the statement and the materials placed before the adjudicating authority. The exception enumerated in paragraph 38 (vi) of Radheshyam Kejriwal 2011 (2) TMI 154 - SUPREME COURT is not application to the facts of the present case, rather the case of the petitioner falls within the ambit of paragraph 38(vii) of Radheshyam Kejriwal (supra) case which states as follows 38. (vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. It is of the opinion that further continuance of the complaint case being Case No. C-2482/2002 pending before the learned Metropolitan Magistrate, 9th Court, Calcutta would be an abuse of the process of the Court and as such the same is hereby quashed.
Issues Involved:
1. Jurisdiction and authority to file the complaint under FERA, 1973. 2. Whether M/s ITC Ltd, being a juristic person, can be subjected to punishment for imprisonment. 3. Impact of exoneration in departmental/adjudication proceedings on the criminal prosecution. 4. Contradictions in the adjudicating authority's findings. Detailed Analysis: 1. Jurisdiction and Authority to File the Complaint under FERA, 1973: The petitioner argued that the complaint was filed without specific permission as required under Section 61(2)(ii) of the Foreign Exchange Regulation Act, 1973 (FERA, 1973). They contended that the cognizance taken was barred under the law. The court examined whether the complainant had the authority to file the complaint and found that the petitioner's argument was valid as the complaint lacked the necessary authorization. 2. Whether M/s ITC Ltd, Being a Juristic Person, Can Be Subjected to Punishment for Imprisonment: The petitioner relied on the judgment of the Hon'ble Supreme Court in The Assistant Commissioner, Assessment-II, Bangalore & Ors. vs. M/s. Velliappa Textiles Ltd & Anr. (2003) 11 SCC 405, to argue that a juristic person cannot be subjected to imprisonment. The court acknowledged this argument but did not solely base its decision on this point. 3. Impact of Exoneration in Departmental/Adjudication Proceedings on the Criminal Prosecution: The petitioner emphasized that they had been exonerated in the departmental/adjudication proceedings, which were identical to the allegations in the criminal proceedings. They relied on the judgment in Radheshyam Kejriwal vs. State of West Bengal & Anr. (2011) 3 SCC 581, where it was held that exoneration in adjudication proceedings on merits should lead to the quashing of criminal prosecution. The court agreed with this argument, noting that the adjudicating authority had categorically found no contravention of FERA provisions by M/s ITC Ltd. and others. 4. Contradictions in the Adjudicating Authority's Findings: The Enforcement Directorate argued that the adjudicating authority's order contained inherent contradictions and failed to consider relevant materials. They pointed to specific paragraphs in the adjudication order that allegedly contradicted each other. However, the court found that the adjudicating authority had thoroughly considered all relevant documents and statements, including those of Mr. N. Lakshminarayan, and had provided cogent reasons for its conclusions. Conclusion: The court concluded that further continuance of the criminal proceedings would be an abuse of the process of the court. The adjudicating authority had exonerated the petitioner on merits, and the criminal prosecution could not be allowed to continue on the same set of facts and circumstances. Thus, the complaint case No. C-2482/2002 pending before the learned Metropolitan Magistrate, 9th Court, Calcutta, was quashed. Orders: 1. The criminal proceedings being Case No. C-2482/2002 are quashed. 2. CRR 1175 of 2004 is allowed. 3. Pending connected applications, if any, are disposed of. 4. All parties are to act on the server copy of this judgment duly downloaded from the official website of this Court. 5. Urgent Xerox certified photocopy of this judgment, if applied for, to be given to the parties upon compliance with requisite formalities.
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