The main legal point established in the judgment is that the provisions of FEMA do not entail custodial interrogation and provide for alternative modes of examination, such as video conferencing, which should be considered before suspending a passport under Section 10(3)(c) of the Passports Act.

Vibhu Bakhru, J.

The petitioner has filed the present petition impugning an order dated 22.09.2015 (hereafter "the impugned order") passed by the Consulate General of India, Dubai, suspending petitioner's passport. The petitioner has been further directed to deliver his passport to the Consulate General of India, Dubai.

2. The petitioner states that he is a Non-Resident Indian (NRI) and has been residing permanently in UAE since 1993. He states that he has been carrying on business in property development and hospitality in UAE since 2011. It is alleged that the petitioner has been involved in money laundering and has transferred the sale proceeds of assets in India, belonging to his father (Late Iqbal Mirchi), to foreign countries. Pursuant to these allegations, certain directives were issued to the petitioner by respondent no.3 (the Directorate of Enforcement ED) and summons were further issued calling upon him to appear in person before the ED.

3. The petitioner's passport has been suspended on the ground that the petitioner has failed to appear in person before the concerned officers investigating the alleged violation of the provisions of Foreign Exchange Management Act, 1999 (hereafter "FEMA").

4. The petitioner contends the action of the respondents to impound his passport is arbitrary inasmuch as it is not based on any relevant material and is completely contrary to the records. The petitioner further contends that he is an NRI and, thus, not covered by the provisions of FEMA. The respondents, on the other hand, contend that Section 3 of the FEMA covers resident, non-resident and foreign nationals and various Regulations of FEMA are also applicable to the NRIs and Person Resident Outside India.

5. The limited controversy which falls for consideration of this Court is whether the action of the respondents to impound the passport of the petitioner is sustainable in law.

Factual Background

6. Pursuant to an order dated 26.03.2007 passed by the Supreme Court in a writ petition filed by the petitioner (being W.P.(C) 531/2006 captioned Junaid Iqbal Memon v. Union of India & Ors.), a passport was issued to the petitioner.

7. Pursuant to the investigation conducted by the ED under the provisions of FEMA, ED issued certain directives by way of letters dated 10.04.2015to the petitioner calling upon him to furnish information in relation to four companies M/s Vantage Enterprises Pvt. Ltd, M/s Rock Stone Reality & Hotels Pvt. Ltd., M/s Relators Hotels Projects Pvt. Ltd and M/s Horizon Estate Constructors Pvt. Ltd. The directives were issued to the petitioner under Section 37 of FEMA read with Section 133(6) of the Income Tax Act, 1961, in his capacity as being one of the Directors of the aforesaid four companies. It was further stated therein that the said information is required to be furnished within fifteen days from the receipt of the said letter.

8. The aforesaid letters were received by the petitioner on 16.04.2015. The petitioner replied to the aforesaid letters by a letter dated 21.04.2015 seeking further time of four weeks to furnish the requisite information sought by the ED.

9. Thereafter, ED sent another letter dated 15.05.2015 under Section 37 of FEMA read with Section 133(6) of the Income Tax Act, 1961 to the petitioner calling upon him to furnish the said information within seven days from the receipt of the letter. In response to the same, the petitioner sent a letter dated 20.05.2015stating that he is an NRI and has been residing in UAE since 1993 and further he does not have any business interest in India and therefore, the directives issued to the petitioner are based on an incorrect presumption that the petitioner is a resident of India. In this view, the petitioner requested the ED to withdraw the directives dated 10.04.2015 and cease the ongoing investigation.

10. The petitioner claims that, nevertheless, by way of the letters dated 02.06.2015 and 03.06.2015, the petitioner submitted the requisite documents