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The case revolves around the seizure of Rs.6,45,000, paper slips, and a mobile phone from the petitioner, Ashraf V.P., by the Sub Inspector of Police, Kadirur, on 26.03.2015. The seizure led to the registration of Crime No.309 of 2015 under Sections 41(1)(d) and 102 of the Cr.P.C. The Enforcement Directorate later became involved, alleging a violation of the Foreign Exchange Management Act, 1999 (FEMA). The learned Magistrate granted interim custody of the cash to the Enforcement Directorate and denied the petitioner's request. The petitioner challenged this decision in the High Court, arguing that the money belonged to a relative and was intended for construction purposes, not for any transaction with residents outside India.
Appeal Details
Counselvise Citation
[2019] 140 COUNSELVISE.COM (IT) 798978 (HC-KERALA)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Others
Pronouncement Date
12-06-2019
Assessment Year
misc
Judgement Text
"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V WEDNESDAY, THE 12TH DAY OF JUNE 2019 / 22ND JYAISHTA, 1941 Crl.MC.No.7743 of 2015 CMP 1433/2015 of ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT, THALASSERY CRIME NO.309/2015 OF Kadirur Police Station, Kannur PETITIONER/ACCUSED: SHRI.ASHRAF V.P., S/O.AHAMMED THAHIRAS, CHOMBIL AMSOM, KUNHIPALLY, KANNUR. BY ADVS. SRI.S.SREEKUMAR (SR.) SRI.M.A.MOHAMMED SIRAJ SRI.P.MARTIN JOSE SRI.P.PRIJITH SRI.THOMAS P.KURUVILLA RESPONDENTS: 1 THE ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT, 3RD FLOOR, KENDRIYA BHAVAN, M.S.BABU RAJ ROAD, KALKI, KOZHIKODE-673 003. 2 THE STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682 031. 3 THE STATION HOUSE OFFICER, KADIRUR POLICE STATION, KADIRUR, PIN-670 642. R1 BY ADV.SRI.K.R.RAJKUMAR, ADDL.CGSC R2 & R3 BY SRI.M.S.BREEZ, SENIOR PUBLIC PROSECUTOR THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 12.06.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Crl.MC.No.7743 of 2015 2 ORDER A sum of Rs.6,45,000/-, certain paper slips containing names of certain persons and a mobile phone were seized from the possession of the petitioner by the Sub Inspector of Police, Kadirur, on 26.03.2015 at 4 pm. As the petitioner failed to account for the money, which was seized from his possession, Crime No.309 of 2015 of the Kadirur Police Station was registered under Sections 41(1), (d) and 102 of Cr.P.C. The seized cash was later produced before the learned Magistrate. 2. The Enforcement Directorate was noticed under the premise that the petitioner had violated Section 3 of the Foreign Exchange Management Act, 1999. The Director, Enforcement Directorate as well as the petitioner filed separate applications seeking interim custody of the cash, which was produced before the learned Magistrate. The learned Magistrate allowed the application filed by the Assistant Director and dismissed the application filed by the petitioner. The aforesaid order is under challenge. 3. Heard Sri.S.Sreekumar, the learned Senior Counsel as instructed by Adv.Sri.Prijith P., appearing for the petitioner and Sri.K.R.Rajkumar, the learned counsel appearing for the Enforcement Directorate. Crl.MC.No.7743 of 2015 3 4. It is submitted by the learned counsel appearing for the petitioner that the amount which was found in the possession of the petitioner belonged to his near relative, one Savad, and it was entrusted with the petitioner for the purpose of constructing a residential building. It is further argued that the provisions of the Foreign Exchange Management Act, 1999 were not attracted as the prosecution has no case that the petitioner has made any payment to any resident outside India or received any payment for any person who is a resident outside India. 5. The learned Public Prosecutor, on instructions, submitted that there are materials to conclude that the money seized by the police was brought from Gulf countries in violation of the provisions of the Foreign Exchange Management Act and it was in the said circumstances that the matter was referred to the Enforcement Directorate for further action. 6. The learned counsel appearing for the Enforcement Directorate contended that the order passed by the learned Magistrate does not warrant any interference as the claim raised by the petitioner would be validly adjudicated by the competent authority and if there is no contravention of the Foreign Exchange Crl.MC.No.7743 of 2015 4 Management Act 1999, the same would be returned to the petitioner. 7. I have considered the submissions advanced and have perused the records. 8. The money seized from the petitioner is now in the custody of the court. The money was seized by the police and crime was registered under Sections 41(1)(d) and 102 of the Criminal Procedure Code. 9. Section 37 of the Foreign Exchange Management Act states that the Director of Enforcement and other officers of Enforcement, not below the rank of an Assistant Director, shall take up for investigation the contravention referred to in Section 13. Sub-section (2) of Section 37 states that the Central Government may, by notification, authorise any officer or class of officers in the Central Government, State Government or the Reserve Bank, not below the rank of an Under Secretary to the Government of India to investigate any contravention referred to in Section 13. In sub- section (3) of Section, 37 it is stated that the officers referred to in Sub-section (1) shall exercise the like powers which are conferred on Income Tax authorities under the Income Tax Act and shall Crl.MC.No.7743 of 2015 5 exercise such powers, subject to such limitations as laid down under that Act. The officers, who are given the powers of investigation regarding the contravention referred to in Section 13 of the Act have the powers in respect of search and seizure similar to the powers given to the Income Tax authorities under the Income Tax Act. Section 13 of the Foreign Exchange Management Act provides for the penalty for contravention of the provisions of the Act. Section 13 states that adjudication regarding the contravention of the provisions of the Act has to be done by the adjudicating authority. It is under Section 16 that the Government is given the power to appoint adjudicating authority. 10. The contravention of the provisions of the Act is not a matter which a criminal court can take into account and there is no provision in the Act which says that on taking cognizance of the contravention of the provisions of the Act, the learned Magistrate can proceed to take action. The penalty provided in Section 13 of the Act has to be imposed by the adjudicating authority after making an adjudication regarding the contravention of the provisions of the Act. The adjudicating authority has the power to confiscate to the Central Government, the money in respect of Crl.MC.No.7743 of 2015 6 which contravention has taken place. It is for the adjudicating authority to take a decision in that regard. 11. Having considered all the relevant aspects, I find no reason to interfere with the order passed by the learned Magistrate. However, taking note of the fact that the seizure was affected in the year 2015, I direct the adjudicating authority to expedite the proceedings and conclude the same after affording the petitioner an opportunity of being heard. He shall be permitted to produce all such documents in his possession before the authority to enable him to substantiate his case. Orders shall be passed expeditiously, at any rate, within a period of 3 months from today. This petition will stand disposed of with the above observations. SD/- RAJA VIJAYARAGHAVAN V., JUDGE DSV/14.06.19 Crl.MC.No.7743 of 2015 7 APPENDIX PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF CMP NO.1433/2015 FILED BY THE PETITIONER BEFORE THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT, THALASSERY ANNEXURE B TRUE COPY OF CMP NO. 2573/2015 FILED BY R1. ANNEXURE C TRUE COPY OF ACCOUNT BOOK OF SUHARA MAINTAINED IN CANARA BANK. ANNEXURE D TRUE COPY OF MEMORANDUM IN RESPECT OF GOLD ORNAMENTS DEPOSITED AS SECURITY IN SBI ANNEXURE E TRUE COPY OF RECEIPTS ISSUED BY CHOMBAL SERVICE CO-OPERATIVE BANK, KUNHIPALLY. ANNEXURE F CERTIFIED COPY OF COMMON ORDER IN CMP NO.1433/2015 AND IN CMP NO.2573 OF 2015 DATED 28/10/2015 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE, THALASSERY AND PHOTOCOPY OF ORDER. RESPONDENT'S/S EXHIBITS: NIL //TRUE COPY// P.A.TO JUDGE Crl.MC.No.7743 of 2015 8 "
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Laws Referred To
Foreign Exchange Management Act, 1999, Criminal Procedure Code
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