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TMI Blog1995 (7) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... mply the mandatory requirement of Section 40 of the FERA Act. The summons have been issued to him as he happened to be the sister s son of Mrs. Sasikala, who is a close friend of Chief Minister of Tamil Nadu. The political overtones of the issuance of summons to the petitioner is all too obvious. Without a shred of evidence of material the petitioner is put to serious prejudice and his personal liberty is in jeopardy. The summons must delineate however skeletal it may be of what the investigation pertains to or the proceedings under the Act, as the same is a condition precedent and sine qua non for a valid summons. There is nothing in the summons to indicate in respect of what investigation or proceedings under the Act that the petitioner is sought to be summoned to appear before the respondent and answer questions or produce the documents and evidence. The proceedings and the subject matter of investigation is absolutely essential, to be furnished to the person summoned to appear. Unless the person concerned is informed of what he had been summoned to answer or the proceedings initiated are taken against him he cannot answer under Section 193 or 228, Indian Panel Code. Without a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any details makes the summons illegal. (ii) There is no application of mind of the respondent in issuing the summons as the printed form has been filled up and sent to the petitioner. The officer has to consider as to the attendance of the petitioner is necessary to give evidence or to produce the documents specified in the schedule. The [clause] `necessary to give evi- dence and/or to produce the documents has been left as it is and hence it is not clear as to whether the attendance of the petitioner is necessary to give evidence or to produce the documents. (iii) The respondent in the summons has directed the petitioner to produce the documents mentioned in the schedule. When the documents are directed to be produced, it is for the respondent to state the nexus between the documents and the object of the enquiry. When there is no details, it has to be presumed that there is no nexus between the documents and the object of investigation. When there is no nexus, the authorities cannot compel the petitioner to produce those documents. 4. The learned Senior Counsel referred to three judgments reported in Barium Chemicals v. A.J. Rana - 1974 L.W. (Crl.) (91), N.C. Jute Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure 1908 (5 of 1908) shall be applicable to any requisition for attendance under this section. (4) Every such investigation or proceedings as aforesaid shall be deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the Indian Panel Code (40 of 1860)." Section 40(1) referred to above makes it clear that any gazetted officer of Enforcement shall have the power to summon any person whose attendance be considers necessary either to give evidence or to produce a document during the course of any investigation or proceeding under this Act. Sub-section (3) clearly makes the persons who are issued with the summons are bound to attend either in person or by authorised agent, as such officer may direct. Sub-section (4) envisaged that every such investigation or proceeding under the Act shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 I.P.C. 7. The learned Senior Counsel for the petitioner did not challenge the power of the respondent to issue such summons. When the summons has been issued to a person, requiring him to produce the records or to give evidence, he cannot be considered to be an accused. He has been summon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note that these sections do not refer to `accused it only refers `any person . 10. When once the power is not challenged, it has to be seen as to whe- ther the power has been exercised by the respondent in an arbitrary manner? 11. According to the points raised by the learned senior counsel for the petitioner, the first point is that the respondent should have mentioned in the notice the nature of investigation and whether the investigation relates to the petitioner or somebody else. When once the authority is empowered to summon any person, whose attendance he considers necessary either to give evidence or to produce a document during the course of investigation or proceeding under this Act, it is open to the authorities to summon any one of them to give evidence or to produce document or for both during the course of investigation or proceeding under the Act. Practically it should be seen as to whether it is possible for the respondent to reveal the nature of the investigation or the person concerned therein in the summons. When the enactment is to safeguard the economy of the country by preventing the unauthorised exchanges, if the authority mentions in the summons as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttendance of the petitioner is necessary for the purpose mentioned in the summons. The non-striking of the words either `and or `or [does] not go to show that the respondent has not applied his mind before ever the summons were issued. Whenever the attendance is required to give evidence and to produce documents, it is clear that the concerned person is required for both the purposes. Some times on production of the documents the authority may satisfy without recording any evidence that the petitioner s involvement is not there, then the petitioner may be free. In case if on the verification of the records he found that the petitioner s involvement is there, in that case, naturally his statement has to be recorded. At this stage, it may not be possible for the concerned authorities to issue summons for a restricted purpose. It is known that the summons are being issued only to hold the preliminary enquiry and hence it would be too premature for the petitioner to contend that the authority should apply his mind for what purpose the petitioner s attendance is required and indicate the same in the summons. Hence this contention is also rejected. 13. So far as the third point is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that he had reason to believe that documents would be, in his opinion, be relevant to or useful for proceedings either pending or contemplated under the Foreign Exchange Regulation Act were secreted or were likely to be secreted. In the present case, the jurisdiction of the officer has not been questioned. Once the power of the authority is not questioned, it is not open to this Court to call for the authority to satisfy this court about his action. 15. The next judgment reported in Gopikishan v. Asst. Collector, Customs, Raipur (AIR 1967 SC 1298). This case also relates to the power of search. In this case, the Supreme Court has held as follows : The second contention is that under S. 105 of the Customs Act, hereinafter called the Act, the Assistant Collector shall have reason to believe that some goods are secreted, before he can authorise any officer of Customs to search for them or the relevant documents, but the authorization given by the Assistant Collector to the Custom Officer did not say that he had reason to believe so. The relevant part of the authorisation reads thus : Whereas information has been laid before me of the suspected commission of offence u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged in collateral proceeding and as such this court need not ask the respondent to satisfy this court with regard to his action. Further Section 40(1) of FERA does not contemplate that the Enforcement should reveal the nature of investigation and purpose of requirement of the documents. 17. So far as in the case reported in Barium Chemicals v. A.J. Rana [1974 L.W. (Crl.) 91]. (AIR 1972 SC 591) the summons has been set aside on the ground of vagueness in respect of the documents called for. The wordings of Section 19(2) of the Foreign Exchange Regulation Act, 1947 corresponding to Section 33 of the Foreign Exchange Regulation Act, 1973. The wordings of the Section is totally different from the wordings of Section 40 of the Foreign Exchange Regulation Act, 1973. In interpreting the wordings therein, the Supreme Court has held as follows :- Before proceeding further, it may be mentioned that the Act was enacted, as according to is preamble, it is expedient in the economic and financial interests of India to provide for the regulations of certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion." Section 19 of the Act co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion for the exercise of this power would arise when either of them, viz., the Central Government or the Reserve Bank, considers it necessary or expedient for the purpose of the Act to obtain and examine any information, book or document. It is only when the said requirement is satisfied that the Central Government or the Reserve Bank, as the case may be, can proceed in the manner indicated above in Clause 2(a) or 2(b). WE ARE IN THE PRESENT CASE NOT CONCERNED WITH THE RESERVE BANK NOR WITH THE SITUATION HEREIN IT WAS CONSIDERED EXPEDIENT TO OBTAIN AND EXAMINE ANY INFORMATION, BOOK OR OTHER DOCUMENT. The impugned order purports to have been made by the Central Government because, according to it, the Central Government considered it necessary for the purpose of the Act to obtain and examine the papers and documents specified in the schedule attached to the order. The question which arises for determination is whether the authority concerned applied its mind so as to show that the Central Government considered it necessary for the purpose of the Act to obtain and examine the papers and documents specified in the schedule. The words `considers it necessary postulate that the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd `such points to the necessity of specifying the information, book or other document in the order. It is, no doubt, true that the order can relate to a large number of books, documents or informations it is all the same imperative that the same should be particularised in the order. According to sub-section (1A) of Section 23 of the Act, if any person contravenes any of the provisions of this Act of any rule, direction or order made thereunder, for the contravention of which no penalty is expressly provided, he shall upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. The fact that penal consequences follow from non-compliance with an order made under sub-section (2) of Section 19 also highlights the importance of specifying the information, book or other document in the order. The order under the above provisions of law is addressed to the person who is either in possession of requisite information, book or other document or is IN THE OPINION OF THE AUTHORITY CONCERNED ABLE TO OBTAIN AND FURNISH SUCH INFORMATION, BOOK OR OTHER DOCUMENT. For compliance with such an order, it is imperative that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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