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TMI Blog2004 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Pyramid Enterprises, which resulted in seizure of Indian currency and other allegedly incriminating documents. The residential premises of the director and partner of the said Pyramid Enterprises were also searched. From the statements recorded from the aforesaid persons, the respondents found that the petitioner had received deposits in the names of foreign nationals and it is in these circumstances that the notice under section 33(2) of the Act was issued. 3. According to the learned senior counsel appearing on behalf of the petitioner, the respondents did not have the power to retain the documents contrary to the provisions of section 41 of the Act and therefore, the petitioner has sought for a mandamus for return of the documents. The Explanation to section 33 of the Act shows that the word "document" used in sections 33, 34 and sections 36 to 41 includes Indian currency, foreign exchange and books of account. 4. Learned senior counsel would submit that the retention is illegal for several reasons. According to him, section 41 of the Act empowers the officer of the Enforcement Directorate to retain the seized docu- ments for a period not exceeding six months a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (SC). 8. Learned senior counsel further submitted that the order dated January 7, 1997, refers to the documents seized from Pyramid Enterprises and one Arul and that it does not refer to any documents insofar as the petitioner is concerned and further, while recording the reasons for retention, the officer only refers to the documents detailed in annexure A, whereas annexure A does not refer to the documents furnished or seized from the petitioner. Therefore, even if this order is a valid order of extension, it does not relate to the documents seized from the petitioner. Learned senior counsel further submitted that though some of the decisions relied on relate to the Customs Act and other such Acts, when Acts are in pari materia, the reasoning applied by the Supreme Court or the High Court for arriving at the necessity to give opportunity in relation to the provisions of one Act can be and shall be applied to the provisions of another Act which is similar. 9. Learned additional senior Central Government standing counsel would submit that the approach of the court with regard to economic offences must be different and in fact, in several decisions of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary to retain them any longer. It was submitted that even after the notice under section 33(2) of the FERA, the petitioner furnished the documents only in instalments over several dates and they were received by the Department over a period commencing from September 28, 1996 and ending with January 2, 1997. He would submit that the notice under section 51 of the Act had also been issued on July 16, 1997. The date when the notice was received is not relevant for fixing the date of commencement of the proceedings, but it is only the date on which it was issued. For this purpose, learned counsel relied on the judgment dated August 31, 1995, passed in Writ Appeal No. 791 of 1995 in Asstt. Director, Directorate of Enforcement v. A.J. Kingsley Fernandes by the First Bench of this Court comprising of K.A. Swami, C.J. (as he then was) and D. Raju, J. (as he then was). 11. Learned counsel submitted that in Nilratan Sircar s case ( supra ), while holding that the Magistrate had no jurisdiction over the articles seized and could not permit their retention after the expiry of the period, the Supreme Court held that the items mentioned in the seizure memo could be retained by the Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e forgotten that section 12(1) is a penal section. The true rule of construction of a section like section 12(1) is, if we may say so with respect, as mentioned by Plowman, J. In re H.P.C. Productions Ltd. [1962] Ch.D 466 at p. 473. . . ****** In London North Eastern Rly. Co. v. Berriman [1946] AC 278 at pages 286, 295 Lord Macmillan observed : Where penalties for infringement are imposed it is not legitimate to stretch the language of a rule, however beneficent its intention, beyond the fair and ordinary meaning of its language . This Court in Tolaram Relumal v. State of Bombay [1955] SCR 158, 164; AIR 1954 SC 496 at pages 498, 499 speaking through Mahajan, C.J. observed : It is not competent to the court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature ." (p. 885) 14. In Deputy Director, Enforcement Directorate v. Naina Maricair AIR 1990 Mad. 22, a Division Bench of this Court noted that for violation of the provisions of the Act, two proceedings are contemplated. One under section 51 which could be followed up by imposition of penalty under section 50 and confiscation under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y case whereby reason of an injunction or order of any court (whether such injunction or order is in relation to the said document or is in relation to any other document reference to which would be necessary for examining or using the said document). ( a )the said document could not be examined fully for the purpose of determining whether it would be evidence of the contravention of any of the provisions of this Act or of any rule, direction or order made thereunder, or ( b )the said document could not be used for commencing any proceedings under section 51 or section 56, or ( c )the proceedings under section 51 or section 56 could not be commenced, the time of the continuance of the injunction or order, the day on which it was issued or made and the day on which it was withdrawn, shall be excluded." 17. Therefore, it follows that the documents seized or furnished can be retained for a period of six months, for the reasons stated in the section. But, before the lapse of the six months period if proceedings under section 51 are commenced, then the documents can be retained until the disposal of the proceedings mentioned in section 41(1). We are not concerned with secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient compliance with the requirements of the statute. It is essential that the information, book or other document should be specified in the order. The word such points to the necessity of specifying the information, book or other document in the order. There has to be some nexus between the documents sought to be obtained and the purpose of the Act. Where such a nexus is missing and the document has no relevance for the purpose of the Act, the condition precedent to the making of an order under section 19(2) must be held to be non-existent." (p. 240) 20. In this section, the word used is instead, "said document". So, the order should disclose that the authority concerned had thought over the matter with relation to the documents in question. This is a sine qua non not only for the original order when the Department considers that the documents are in contravention and that they are necessary, but also when the subsequent order of extension is passed. But, as seen already, the order dated 7-1-1997, was passed exactly five days after the documents were furnished, and is not really an extension order as per the proviso. Even if the order is held to refer to the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made for the return of the documents when the officer could exercise his powers to summon them. If a direction to return the documents is to be issued, it is only for the purpose of making the Enforcement Officers obey the provisions of the Act." (p. 501) 24. The order of the Supreme Court referred to by learned senior counsel for the petitioner in Arjunan Chettiar s case ( supra ) also does not lay down the law in favour of the petitioner. It is only an expression of disapproval at the action of the officers of the Enforcement Directorate in retaining the documents. However, it is clear from the said order that no stay was granted, which would have resulted in return of the documents. 25. There is another perspective from which this question can also be looked at. The Customs Act provides that if the notice is not given under section 124 within six months, the goods shall be returned. Therefore, the consequence of not adhering to the time frame is laid down in the Act. Whereas, no such default provision is stipulated in section 41 of the FERA. It merely says that they shall not be entitled to retain the documents seized beyond a period of six months. In Bhavnagar Univer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same will be held to be directory unless the consequences therefor are specified. . . ." (p. 589) 29. On a consideration of these legal provisions as well as the approach taken by the Supreme Court as well as the Division Bench of this Court, even while disapproving the retention of the documents by the respondents beyond the time frame prescribed, one must conclude that the mandamus prayed for cannot be granted. 30. The question of affording a pre-decisional or post-decisional hearing after the order of extension was passed also does not arise in this case since as I have already held, the order dated January 7, 1997, is not an order of extension as per the proviso to section 41. The date from which the six months period starts is only January 2, 1997 and therefore, the question whether the petitioner should be afforded a hearing as held by the Supreme Court in decisions which arose under the Customs Act need not be considered here, since there was no order of extension before the expiry of the six months period, which would have fallen on July 1, 1997. Instead, 15 days thereafter, the respondents issued the notice under section 51. The commencement of proceedings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the other provisions of the Act also. It is undeniable that the authorities will necessarily have to adhere to the time frame and be conscious that before the lapse of the six months, if they think it necessary to retain the documents, orders should be passed recording the reasons therefor in writing. However, the failure to do so alone will not entitle the petitioner the right to have a mandamus issued in his favour. 33. Even in Nilratan Sircar s case ( supra ) the Supreme Court considered whether the order of the High Court directing return of the two documents to the respondent was a correct order. The Supreme Court also observed that for the return of documents, no express provisions are necessary. It was held as follows : ". . . Documents seized have to be returned if the law provides that they are not to be retained after a certain period of time. Such a direction under the statute is sufficient justification and authority for the person in possession of the documents to return them to the person from whose possession they had been seized. Provisions are necessary for retaining documents of others and not for returning them to the persons entitled." (p. 6) 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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