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TMI Blog1986 (12) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... gment due, but the same was actually received by the petitioner only on October 19, 1985. In W. P. No. 11605 of 1985, the seizure of the currency was on October 12, 1984. The notice dated October 4, 1985, is said to have been sent by registered post on October 7, 1985, but the same was received by the petitioner on October 17, 1985. In W. P. No. 11606 of 1985, the seizure of the currency was on October 12, 1984. The notice dated October 4, 1985, was sent on October 7, 1985, which was received by the petitioner on October 18, 1985. Sections 41, 50 and 51 of the Act, which are the relevant provisions for consideration of the point raised in these cases, run as follows : "41. Custody of documents, etc. Wherein pursuance of an order made under sub-section (2) of section 33 or of the provisions of section 34 or section 36 or section 37 or of a requisition or summons under section 39 or section 40, any document is furnished or seized and any officer of enforcement has reason to believe that the said document would be evidence of the contravention of any of the provisions of this Act or of any rule, direction or order made there under, and that it would be necessary to retain the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade thereunder, the adjudicating officer shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section." There is no dispute that the term "documents" in section 41 includes currency notes. As may be seen from section 41, where the enforcement officer has reason to believe that the currency would be evidence of contravention of any of the provisions of the Act or any of the rules, directions or orders made thereunder, it would be necessary to retain the same in his custody and he may so retain the said currency for a period not exceeding one year from the date of such seizure. Section 41 further states that if before the expiry of the said period of one year from the date of seizure any proceedings under section 51 have been commenced, he can retain the same until the disposal of those proceedings. Section 51 provides the necessity for holding an inquiry and coming to a finding that the person has committed a contravention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating officer, the adjudicating officer may proceed with the inquiry in the absence of such person after recording the reasons for doing so. (7) If, upon consideration of the evidence produced before the adjudicating officer, the adjudicating officer is satisfied that the person has committed the contravention, he may, by order in writing, impose such penalty as he thinks fit in accordance with me provisions of section 50 : Provided that the notice referred to in sub-rule (1) and the personal hearing referred to in sub-rules (3), (4) and (5) may, at the request of the person concerned, be waived." Rule 2( b ) of the Rules defines "adjudicating officer" as meaning the Director of Enforcement or any other officer of enforcement empowered to adjudicate cases under section 50. Sub-rule (1) of rule 3 requires that the adjudicating officer shall, in the first instance, issue a notice to the person requiring him to show cause within such period as may be specified in the notice why adjudication proceedings should not be held against him and only if the adjudicating officer, after consideration of the reply sent by the person in response to the notice under sub-rule (1), is of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry under section 51 for the purpose of adjudging under section 50" imply that even the notice issued under sub-rule (1) of rule 3 is one under section 51 and it is to be treated as the commencement of the adjudication proceedings. I am unable to accept this contention of the learned counsel. We should keep in mind that in all cases where such documents or currencies are seized, they are not necessarily evidence of contravention of any of the provisions of the Act or the Rules framed thereunder. It may be that sub-rule (1) of rule 3 provides a safeguard to exclude those innocent persons from the humiliation of the proceedings for adjudication under section 51, and, therefore, before adjudication proceedings are initiated, a notice was required to be issued to him so that he can explain that there was no contravention of the provisions of the Act or the Rules framed thereunder. If even after that, the adjudicating officer was of opinion that an enquiry under section 51 of the Act is called for, then he decides to hold the enquiry and then only it could be said that a regular legal proceeding for holding the enquiry had commenced. I am unable to extend the commencement of the enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention that the commencement of the proceedings under section 51 is with the notice under sub-rule (1) of rule 3. In that case arising under the Foreign Exchange Regulation Act, 1947, which contained analogous provisions, a certain sum of money was seized from the party therein on May 12, 1973. There was also a provision similar to rule 3 in the 1957 Rules framed under the Act of 1947. The notice under sub-rule (1) was issued on April 10, 1974, but that was returned unserved. In the meantime, the respondent therein issued a notice on July Mi, 1974, for the return of the money as the period of one year had expired. The Department sent a reply to this letter on July 20, 1974, stating that they had already sent a notice on April 10, 1974, which had been returned unserved. On these facts, the question, as posed by the Division Bench, was whether the department was entitled to retain the documents, i.e., currency notes, pending the proceedings. It was contended on behalf of the writ petitioner therein that mere issue of a notice is not enough and the one-year period will have to be determined with reference to the date on which the notice was served. Repelling this contention, the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terday (December 23, 1986) and continued today. The learned counsel for the respondents had, therefore, enough time to answer this contention. In the circumstances, therefore, I could not accept the contention of learned counsel for the respondents that the petitioners are not entitled to raise this point. The learned counsel for the petitioners, as already stated, further argued that in any case the date of service of the notice is the relevant date for the purpose of determining the commencement of the adjudication proceedings under section 51 and the mere issuance of the notice or posting of it will not be enough. In this connection, four dates are relevant: (1) date of the notice, (2) date on which it was posted, (3) the date on which it was normally expected to be delivered by the postal authorities, and (4) the date on which it was actually delivered. However, I am not going into the question as to what is the relevant date in these cases since in my view this notice is not relevant and the notice as per rule 3(3) is the notice that commences the adjudication proceedings under section 51 as such. In support of his argument, learned counsel for the petitioners also cited a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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