ORDER

1. Aggrieved by the non-return of 6 kgs of gold and Indian currency amounting to Rs. 1,49,000/- seized from the business premises of the Petitioner on 11th July 2005 by the Officers of the Enforcement Directorate („ED) the Petitioner has approached this Court under Article 226 of the Constitution.

2. The case of the Petitioner is that he is a Director of M/s. J.P. Goel & Sons Pvt. Limited. On 11th July 2005 the business premises of the Petitioner were searched by the Officers of the ED. During the course of search, 6 kgs of gold and Indian currency in the sum of Rs. 1,49,000/- were seized. A copy of the panchnama dated 11th July 2005 has been enclosed. It is submitted that thereafter, despite numerous representations of the Petitioner for release of the gold as well as the Indian currency, there was no response from the ED. The Petitioner contends that the seizure was illegal since Section 3 of the Foreign Exchange Management Act, 1999 („FEMA Act) permits seizure only of foreign exchange. In other words, it is submitted that officers of the ED had no authority to seize either gold or the Indian currency. Despite the passage of over four and half years since then not even a show cause notice has been issued to the Petitioner.

3. It is further submitted that although search proceedings were conducted under Section 37 of the FEMA read with Section 132 of the Income Tax Act, 1961 („IT Act), there was no authority to detain indefinitely the seized gold and Indian currency without issuing any show cause notice to the Petitioner.

4. On 22nd July 2009 the following order was passed by this Court:

“1. On 11th July 2005 the Enforcement Directorate had conducted search under the Foreign Exchange Management Act, 1999 in the premises of the Petitioner located at 1326, 3rd Floor, Main Road, Chandni Chowk, Delhi and seized 6 kg. Gold and Indian Currency amounting to Rs. 1,49,000/-. 2. The Petitioner was compelled to file this writ petition in 2008 as the Respondents had failed to release 6 kg. of gold and Indian Currency though no violation of Foreign Exchange Management Act, 1999 was alleged and the seized material was not subject matter of any adjudication proceedings before the Respondent- Enforcement Directorate.

3. In the counter affidavit filed by the Respondents they have admitted that 6 kg. of gold and Rs. 1,49,000/- seized from the premises of the Petitioner are not subject matter of any adjudication proceedings pending under the said Act. It is, however, stated that they had informed Income Tax Department about the said seized vide letter date 30th October 2007. The counter affidavit, however, does not state whether Income-Tax Department had responded to the said letter. It is stated that reminder dated 28th May 2008 was sent. It is apparent that the reminder was sent after copy of this writ petition was served on the Enforcement Directorate.

4. Learned counsel for the Enforcement Directorate states that Income-Tax Department had issued notice dated 20th July 1999 with the warrant of authorization under Section 132A of the Income-Tax Act, 1961 requisitioning 6 kg gold bars. 5. Issue notice to the Standing Counsel for the Income-Tax Department to explain why they had delayed issue of notice. The Respondent-Enforcement Directorate will also file an affidavit in this Court explaining and stating whether provisions of the Income-Tax Act, 1961 were complied with to retain the seized material in accordance with law. The Respondent-Enforcement Directorate will also explain their stand why Rs. 1,49,000/- have not been returned to the Petitioner though the said amount has not been requisitioned by the Income-Tax Department. The Respondent-Enforcement Directorate will produce original files in this Court. Affidavit will be filed by the Respondents within four weeks. 6. List on 1st September 2009.”

5. On the next date learned Standing counsel for the Income-Tax Department („IT Department) appeared and sh

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