IMPORTANT POINT
Violation or contravention of the directions given under the summons under Section 40 of the FERA would come within the purview of Section 56 and, therefore would be punishable thereunder.

Headnote:Foreign Exchange Regulation Act, 1973-Section 56 r/w Section 40-Offences and prosecution-Refusal to comply with summons under Section 40-Violation or contravention of directions given under summons under Section 40 would come within purview of Section 56 and therefore would be punishable thereunder-Expression in any other case in clause (ii) of Section 56 should not be given restrictive meaning to the effect that it must be in relation to money value involved.
       Held : The provisions of Section 40 itself, which confers power on the officer of Enforcement Directorate, to summon any person whose attendance, he considers necessary during the course of any investigation, makes it binding as provided under sub-section (3) of Section 40, and the investigation or the proceeding in course of which such summons are issued have been deemed to be a judicial proceeding by virtue of sub-section (4) of Section 40. These principles should be borne in mind, while interpreting the provisions of Section 40 and its effect, ;if a person violates or disobeys the directions issued under Section 40. (Para 4)
       Clauses (i) and (ii) of Section 56(1) are material for deciding the quantum of punishment and further, there is no reason why the expression "in any other case" in Section 56(1)(ii) should be given any restrictive meaning to the effect that it must be in relation to the money value involved. The summons issued under Section 40, if not obeyed, must be held to be a contravention of the provisions of the Act and at any rate, a contravention of a direction issued under the Act, and therefore, such contravention would squarely come within the ambit of Section 56 of the Act. (Para 5)
       The interpretation that Section 56 would bring within its sweep only such violation or contravention which under different provisions of the Act have been deemed to be a contravention under the Act like Section 43(4), Section 8(1) read with Section 45(1), Section 49 and so on would make the power to summons under Section 40 meaningless and the provisions of sub-section (3) of Section 40 making it bounden duty for the persons summoned to attend purposeless. (Para 6)
       Therefore violation or contravention of the directions given under the summons under Section 40 of the FERA would come within the purview of Section 56 and, therefore would be punishable thereunder. (Para 6)

JUDGMENT

Pattanaik, J.-All these appeals are directed against a common judgment of a learned Single Judge of Delhi High Court and a common question of law arises and as such they are heard together and are being disposed of by this common judgment. The question for consideration in all these appeals is whether refusal on the part of a person, who is summoned under Section 40 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the Act ) to comply with the directions under the summons, would attract the provisions of Section 56 of the Act? The High Court by the impugned judgment came to the conclusion that the provisions of Section 56 of the Act will not get attracted for violations of the dirrections under Section 40 of the Act and, accordingly, the complaints filed for such violation and cognizance taken in the complaint cases have been quashed.

2. Mr. Mukul Rohtagi, the learned Additional solicitor General, contended that the power having been conferred on the officers of the Enforcement Directorate to summon any person, whose attendance is necessary, either to give evidence or to produce a document, in course of any investigation or proceeding under the Act and the Act itself having made it binding on the person summoned to attend, as provided in sub-section (3) of Section 40, the refusal on the part of the person summoned to carry out the obligation under the statute, should be seriously viewed and must be held to be a a contravention of the provisions of the Act, making such contravention punishable under Section 56 of the Act, and the High Court was in error in quashing the complaints filed.

3. Mr. R.K. Handoo, the learned counsel appearing for the accused respondents in some of the appeals as well as Mr. A.K. Ganguly, the learned senior counsel, appearing for the accused in some of the appeals, however contended that the orders/directions, violation of which is punishable under Section 56 of the Act are those statutory orders or directions and the summons issued under Section 40 has no statutory character and, therefore, the said violation by the person summoned, cannot be made punishable under Section 56 of the Act. It was also further contended that the offence not being defined under the Act, one will have to examine the definition of offence in General Clauses Act and on such an examination, it would appear that the impugned violation cannot be held to be an offence and, therefore, cannot be made punishable under Section 56 of the Act, and the High Court, therefore was fully justified in quashing the complaints filed. For better appreciation of the contentions raised, it would be necessary to extract the provisions of Section 40 and Section 56 of the Act in extenso :

"Section 40 : Power to summon persons to give evidence and produce documents-

(1) Any Gazatted officer of Enforcement shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document during the course of any investigation or proceeding under this Act.

(2) A summons to produce documents may be for the production of certain specified documents of a certain description in the possession or under the control of the person summoned.

(3) All persons so summoned shall be bound to attend either in person or by authorised agents, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required;

Provided that the exemption under Section 132 of the Code of Civil Procedure,1908, shall be applicable to any requisition for attendance under this Section.

(4) Every such investigation or proceeding as aforesaid shall be deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the Indian Penal Code.

Section 56 : Offences and prosecutions:-

(1) Without prejudice to any award of penalty by the adjudicating officer under this Act, if a

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2000 Supreme(SC) 1022

IMPORTANT POINTViolation or contravention of the directions given under the summons under Section 40 of the FERA would come within the purview of Section 56 and, therefore would be punishable thereunder.

Cases Referred (1)

IMPORTANT POINT
Violation or contravention of the directions given under the summons under Section 40 of the FERA would come within the purview of Section 56 and, therefore would be punishable thereunder.