The Enforcement Directorate has the power to seize money used in violation of the Foreign Exchange Regulations Act, 1973, and the courts should consider the department's claim before passing orders for the return of such money to the owner.

A.P.Chowdhri, J.

1. The factual background necessary for the disposal of this criminal revision is as under :-

2. One Subhash Chander worked as Salesman of the shop of one Mehnga Ram and was thus known to him. On 16.7.1987 Mehnga Ram sent Subhash Chander to Delhi to bring a sum of Rs. 3,30,000/- from one Brij Mohan, Subhash Chander collected the amount and was bringing it in a cloth bag. He was travelling on the night between 16th and 17th July, 1987, by Shane Punjab train. When he reached Ambala Cantt he found the bag missing. He raised alarm and came out of the compartment and found that the police had apprehended two persons, namely, Paramjit Singh and Jagjit Singh sons of Diwan Chand and the bag containing the money was in the hand of the Sub-Inspector. Case FIR No. 103 dated 17.7.1987 was registered. The accused were tried. They initially pleaded not guilty. After a number of adjournments, they made an application that they wanted to make a confession. Their plea was recorded and they were convicted by the Special Railway Magistrate, Ambala, under Section 379 of the Indian Penal Code was sentenced to simple imprisonment for one year and a fine of Rs. 100/- each. During the pendency of the aforesaid trial, an application dated 21.7.1987 was made by Mehnga Ram for return of the amount on superdari under Section 451 of the Code of Criminal Procedure. The learned Magistrate directed vide order dated 3.8.1987 that the amount shall be deposited in Treasury during the trial. One other application which is undated was made before 11.1.1988 by the Assistant Director, Enforcement Directorate, Jalandhar for giving the amount to that department in connection with proceedings under Foreign Exchange Regulations Act against Mehnga Ram and Subhash Chander. A perusal of the original record of the trial Court shows that the Public Prosecutor/representative of the Enforcement Directorate kept attending various dates of hearing in connection with consideration of the said application and the last date on which attendance was made on behalf of the department was 2.11.1988. The learned Magistrate, however, passed no order on the said application. Ultimately, the accused in that case were convicted and sentenced as already stated but no order with regard to disposal of the case property i.e. the aforesaid amount was passed. The convicts preferred an appeal which was disposed of by the learned Additional Sessions Judge, Ambala, by order dated 4.4.1989. Only sentence was assailed in the appeal. The sentence was set aside and instead the accused were directed to be released on probation. Learned Additional Sessions Judge took up the application of Mehnga Ram and noted that the amount had been recovered from the possession of Subhash Chander, that Subhash Chander had no objection to the amount being returned to the real owner Mehnga Ram. Statement of Mehnga Ram was also recorded. He claimed the amount to be his own and he added that the amount had been sent by him from Dubai through Bank drafts. He also produced photostat copies of the bank drafts. The lower appellate Court directed the amount to be returned to Mehnga Ram on his undertaking to produce the same in the Court in case any better claimant came forward and established his claim. Aggrieved by the orders with regard to return of the amount, the Enforcement Directorate under the Foreign Exchange Regulations Act, 1973, has preferred this revision. It has been opposed by Mehnga Ram.

3. In the grounds of revision, it has been stated by the Enforcement Directorate that Mehnga Ram who has been residing at Dubai had been indulging in violation of Foreign Exchange Regulations. He had been making compensatory payments at the instance of several persons at Dubai where he was collecting foreign exchange and in lieu thereof he was paying Indian currency to persons or their relatives or friends from who he collected the foreign exchange. In this connection, the Directorate had recorded statemen