1990 (12) TMI 248 - HC - FEMA

Summary

Issues: Premature prosecution under FERA, dispensation of penalty deposit for appeal, interpretation of FERA provisions, quashing criminal proceedings.

In this judgment by the Madras High Court, the petitioner was accused of contravening the provisions of Section 9(l)(b) of the Foreign Exchange Regulation Act, 1973 (FERA). The Enforcement Directorate conducted a search of the petitioner's premises in 1985, leading to the initiation of adjudicatory proceedings. The Deputy Director, Enforcement Directorate, imposed a penalty and confiscated a sum of money. The petitioner received the order in 1986 and filed an appeal within the specified time, seeking dispensation of the penalty deposit under Rule 6A of the Adjudication Proceedings and Appeal Rules, 1974. The respondent filed a complaint for non-payment of penalty, leading to criminal proceedings. The petitioner sought to quash the criminal proceedings, arguing that the prosecution was premature as she had filed the appeal within the prescribed period.

The petitioner contended that under Section 52(2) of FERA, two conditions must be fulfilled when opting to appeal: depositing the penalty and filing the appeal within forty-five days of receiving the order. Although the appeal was filed within the stipulated time, the penalty amount was not deposited. The petitioner argued that Rule 6A allows for dispensation of the deposit in certain situations, which applied to her case as she had filed an application for dispensation. However, the court noted that the mere acceptance of the appeal by the Board did not imply dispensation of the penalty deposit unless there was a specific order to that effect.

The court emphasized that without a specific order from the Board dispensing with the penalty deposit, the contravention under FERA would stand. As the petitioner failed to deposit the penalty within forty-five days of receiving the order, the offense under FERA was deemed to have occurred. Therefore, the court dismissed the petition to quash the criminal proceedings, stating that the petitioner must face trial in the lower court as per the law.