2011 (7) TMI 1291 - HC - FEMA

Summary

Issues Involved:
The judgment involves the challenge to the acquittal of the Respondent for the charge u/s 56(1) of Foreign Exchange Regulation Act 1973 (FERA) by the Special Court for Economic Offences, Bangalore.

Issue 1: Service of Summons under FERA

The Appellant, an Assistant Director in Enforcement Directorate, issued summons to the Respondent under Section 40 of FERA for investigation. The summons were affixed on the premises as the Respondent was not available. The Appellant alleged that the Respondent contravened Clause 40(3) of FERA, punishable u/s 56(1)(ii) of FERA. The Trial Court acquitted the Respondent, leading to the appeal.

Issue 2: Legal Interpretation of FERA Provisions

The Appellant argued that the Respondent disobeyed the summons issued u/s 40(3) of FERA, which constitutes an offence u/s 56(1) of FERA. However, the High Court analyzed the provisions of FERA, emphasizing that disobedience of summons is distinct from contravention of FERA provisions. The Court referred to a Kerala High Court decision supporting this interpretation.

Judgment Summary:

The High Court examined the provisions of FERA related to issuing summons and serving them under Rule 3 of Foreign Exchange Regulation Rules, 1974. The Court noted that the Appellant followed the prescribed procedure for substituted service by affixing the summons on the premises where the Respondent last resided. The Appellant alleged that the Respondent contravened FERA provisions, leading to the charge u/s 56(1)(ii) of FERA.

Upon analysis, the Court concluded that disobedience of summons is not equivalent to contravention of FERA provisions. The Court highlighted that the disobedience of summons does not constitute an offence under FERA. Referring to a Kerala High Court decision, the Court emphasized the distinction between disobeying a summons and contravening FERA provisions. Consequently, the Court upheld the Trial Court's acquittal of the Respondent, stating that the Appellant failed to establish grounds for interference. Therefore, the appeal was dismissed.