Judgment :- PADMINI JESUDURAI, J The short point involved in this writ appeal is whether, the show cause notice issued under Rule 3(1) of the Adjudication Proceedings and Appeal Rules, 1974 framed under the Foreign Exchange Regulation Act, 1973 is or is not notice of the commencement of adjudication proceedings under Section 51 of that Act. 2.The respondent filed W.P. No. 7832 of 1987 on the averment that on 21-5-1986, the Enforcement Officials seized from his residential premises a sum of Rs. 1, 60, 000/- Indian currency belonging to him, for alleged violation of Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the Act) and that Section 41 of the Act permits retention of the amount beyond a period of one year if proceedings either under Section 51 of the Act or prosecution under Section 56 of the Act had been commenced and in the received any show cause notice about any adjudication proceedings, that the appellants Department could no longer retain the currency and that, therefore, a writ ofMandamusought to be issued to them, directing them to return the currency to him. 3.The appellants resisted the action, admitting that the seizure was made on the day alleged, but contended that the seizure was for contravention of the provisions of Section 9(1)(b) of the Act, that adjudication proceedings under Section 51 of the Act had really been commenced, since even on 8-5-1987 i.e., within a period of one year a show cause notice, as contemplated under Rule 3(1) of the Adjudication Proceedings and Appeal Rules, 1974 (hereinafter referred to as the Rules) had been issued and since the respondent evaded service, the notice was served in the manner provided for in law and that in view of the fact, that even on 8-5-1987 a show cause notice was issued, the enabling provision of Section 41 of the Act justifies their retention of the property beyond the period of one year. 4.Learned single Judge, relied upon the judgment of v. Ramaswami, J., (as he then was) inR. Sivarajan v. Deputy Collector, Madras(Vol. 12) 1987 Excise and Customs Cases 256, wherein the learned Judge had held that proceedings under Section 51 of the Act commence, only when a notice of hearing under Rule 3(3) is issued and not when a show cause notice under Rule 3(1) is issued. Sivarajan v. Deputy Collector, Madras(Vol. 12) 1987 Excise and Customs Cases 256, wherein the learned Judge had held that proceedings under Section 51 of the Act commence, only when a notice of hearing under Rule 3(3) is issued and not when a show cause notice under Rule 3(1) is issued. Learned single Judge, therefore, held that since no notice under Rule 3(3) of the Rules had been issued within the period of one year from the date of seizure by the appellants, the appellants could not in law retain the currency and allowing the writ petition issued amandamusdirecting the appellants to return the currency to the respondent. Aggrieved with the order, this writ appeal is filed by the Enforcement. 5.The only point canvassed before us is whether adjudication proceedings under Section 51 of the Act commence on the issuance of a show cause notice under Rule 3(1) or whether it commences only when a notice of bearing is issued under Rule 3(3). 6.Thiru S. Veeraraghavan, Additional Central Government standing counsel for appellants, placed reliance upon an earlier decision of V. Ramaswami, J., (as he then was) inK.A. Abdul Khaderv. Deputy Director, Enforcement Information Directorate, Madras 1976 AIR(Madras) 233) as also the decision of the Division Bench of this Court in the appeal filed against the above decision viz.. The Deputy Director of Enforcement, Enforcement Directorate, Madras, v. KA. Abdul Khader (Judgmentdated 16-9-1976 in W.A. No. 65 of 1976). Reliance was also placed upon a decision of the Ker. H.C. inBhaskaran Filialv. Enforcement Directorate 1978 KLT 436 ) to contend that proceedings under Section 51 of the Act commence, when a show cause notice under Rule 3(1) is issued. 7.Per contra, Thiru Krishnamaraju, learned counsel for the respondent, placing reliance upon the later judgment of V. Ramaswami, J., (as he then was)R. Sivarajanv. Deputy Director Madras (Vol.12) 1987 Excise and Customs Cases 256, contended that the learned Judge therein had gone in depth into the aspect and had given proper reasons for construing the relevant rules, that adjudication proceedings commence only when notice under Rule 3(3) is issued and not until then. Deputy Director Madras (Vol.12) 1987 Excise and Customs Cases 256, contended that the learned Judge therein had gone in depth into the aspect and had given proper reasons for construing the relevant rules, that adjudication proceedings commence only when notice under Rule 3(3) is issued and not until then. 8.Before referring to the various decisions that were placed before us, it would be appropriate to analyse the related provisions of the Act Section 41 of the Act is as follows: "Where in pursuance of an order made under sub-section (2) of Section 33 or of the provisions of Section 34 or Section 36 or Section 37 or of a requisition or summons under Section 39 or Section 40, any documents is furnished or seized and any officer of Enforcement has reason to believe that the said document would be evidence of the contravention of any of the provisions of this Act or of any rule, direction or order made there under and that it would be necessary to retain the document in his custody, he may so retain the document in his custody, he may so retain the said document for a period not exceeding one year or if, before the expiry of the said period of one year, any proceedings - (i) under Section 51 have been commenced, until the disposal of those proceedings, including the proceedings, if any, before the Appellate Board and the High Court, or (ii) under Section 56 have been commenced before a court, until the document has been filed in the court.' A reading of the above provision clearly indicates that it is concerned primarily with documents that have come into the possession of the Enforcement Officers under Sections 33, 34, 36, 37, 39 and 40. Section 33 enables the Enforcement to require any person who has to submit returns of foreign exchange, foreign security or immoveable property held outside India, to produce any document which they consider expedient to obtain and examine for the purpose of the Act. Section 34 enables them to search and seize from persons the documents which would be useful for or relevant to any investigation or proceeding under the Act. Section 36 gives similar power to stop and search conveyances. Section 37 enables the Enforcement to search and seize from premises. Section 34 enables them to search and seize from persons the documents which would be useful for or relevant to any investigation or proceeding under the Act. Section 36 gives similar power to stop and search conveyances. Section 37 enables the Enforcement to search and seize from premises. Sections 39 and 40 enable them during the course of any investigation or proceeding under the Act, to require any person to produce or deliver any document, which they consider would be relevant to the investigation or proceeding. It is, therefore, clear that for the purpose of effectively enforcing the Act, the officers of the Enforcement are given the power to seize documents, which they consider would be relevant and useful for any proceeding that could be taken under the Act. While the provisions are primarily intended for documents by virtue of an explanation appended to Section 33, currency is also included in the term 'document'. Explanation to Section 33 is as follows :" * For the purposes of this section. Section 34 & Secs. 36 to 41 (both inclusive) "document' includes Indian currency, foreign exchange and books of account.' 9.For violations of the provisions of the Act, two proceedings are contemplated. The first one is an adjudication proceedings under Section 51 of the Act, which could be followed up by imposition of penalty under Section 50 and confiscation under Section 63. The second proceeding contemplated is a criminal prosecution under Section 56 which would include, besides the penal consequences mentioned in that Section, confiscation of the property under Section 63. The documents, therefore, have to be retained, if they are considered useful or relevant for any one of these proceedings. This is the object of permitting the Officers of the Enforcement to retain the documents that have come into their possession under various provisions referred to above. Being a power given to the Enforcement Officers to enable them to effectively enforce the Act, whose primary object is to stop drainage of foreign capital too strict an interpretation cannot be put. At the same time, the Statute has taken care to see, that this power of retention, should not be abused by the officers by refraining from taking action within a reasonable time and putting the matter into cold storage, thereby causing considerable hardship to the individuals affected. At the same time, the Statute has taken care to see, that this power of retention, should not be abused by the officers by refraining from taking action within a reasonable time and putting the matter into cold storage, thereby causing considerable hardship to the individuals affected. Section 41, therefore, imposes a time limit, as a safeguard against any such possible abuse. It is, therefore, provided that within the period of one year from, either commencement of the adjudication under Section 51 or commencement of a prosecution under Section 56, the documents ought to be returned to the party. One cannot also miss the fact that the Enforcement Officers, even in proceedings conducted under the Act have a right to summon documents from any person. 10.Keeping this in the background, we shall now deal with the procedure contemplated for adjudication proceedings under Section 51 of the Act, which is as follows :" * For the purpose of adjudging under Section 50 whether any person has committed a contravention of any of the provisions of this Act (other than those referred to in that Section) or of any rule, direction or order made thereunder, the adjudicating officer shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section." 11.The procedure indicated in Rule 3 is as follows : " 3. Adjudication proceedings: (1) In holding an inquiry under Section 51 for the purpose of adjudging under Section 50 whether any person has committed contravention as specified in Section 50, the adjudicating officer shall, in the first instance, issue a notice to such person requiring him to show cause within such period as may be specified in the notice (being not less than ten days from the date of service thereto) why adjudication proceedings should not be held against him. (2) Every notice under sub-rule (1) to any such person shall indicate the nature of offence alleged to have been committed by him. (2) Every notice under sub-rule (1) to any such person shall indicate the nature of offence alleged to have been committed by him. (3) If after considering the cause, if any, shown by such person, the adjudication proceedings should be held, he shall issue a notice fixing a date for the appearance of that person either personally or through his lawyer or other authorised representative. (4) On the date fixed, the adjudicating officer shall explain to person proceeded against or his lawyer or authorised representative the offence, alleged to have been committed by such person indicating the provisions of the Act or of the rules, directions or orders there under in respect of which contravention is alleged to have taken place.(5) The adjudicating officer shall then give an opportunity to such person to produce such documents as he may consider relevant to the inquiry and if necessary, the hearing may be adjourned to a fature date : and in taking such evidence the adjudicating officer shall not be bound to observe the provisions of the Indian Evidence Act, 1872 (1 of 1872). (6) If any person fails, neglects or refuses to appear as required by sub-rule (3) before the adjudicating officer, the adjudicating officer may proceed with the enquiry in the absence of such person after recording the reasons for doing so. (7) If, upon consideration of the evidence produced before the adjudicating officer, the adjudicating officer is satisfied that the person has committed the contravention, he may, by order in writing, impose such penalty as he thinks fit in accordance with the provisions of Section 50 : Provided that the notice referred to in sub-rule (1) and the personal hearing referred to in sub-rules (3), (4) and (5) may, at the request of the person concerned, be waived.' A reading of the rule would show that the rule contemplates that the Enforcement Officers shall initially place before the adjudicating officers materials which would make out contravention of any of the provisions of the Act. On that, the adjudicating officer issues a show cause notice to the person wherein the nature of the offence alleged to have been committed by him is to be stated. The person is called upon to show cause, if any, as to why adjudication proceedings ought not to be held. On that, the adjudicating officer issues a show cause notice to the person wherein the nature of the offence alleged to have been committed by him is to be stated. The person is called upon to show cause, if any, as to why adjudication proceedings ought not to be held. In the event of a person showing sufficient cause, which the adjudicating officer accepts, the proceedings under Section 51 of the Act come to an end. If, however, no cause is shown or the cause shown is unacceptable, the proceedings continue and the person is required to appear before the adjudicating officer, either in person or through his lawyer. The oral enquiry then commences. Under Rule 3(4) the adjudicating officer is to explain to the person or his counsel, as the case may be, the offence that is alleged to have been committed by such person, indicating the provisions of the Act. Then the person is given an opportunity to produce oral or documentary evidence and on the consideration of the evidence placed before the adjudicating officer suitable orders are passed. The only document that is supplied to the person which contains the materials placed against him as also the contravention, is the show cause notice issued under Rule 3(1). The second notice under Rule 3(3) is a mere intimation of the date of hearing for the further proceedings. 12.A comparative study of adjudication proceedings in an analogous Act viz., the Customs Act of 1962 would help us in deciding this legal issue. Under Section 110 of the Customs Act the Customs Officials are empowered to seize goods liable for confiscation under the Act. Under Sections 111, 113, 118, 119, 120 and 121 certain types of goods seized, are liable for confiscation. Section 122 requires that where any goods is liable for confiscation or penalty there should be an adjudication proceeding to be conducted by the Officers mentioned in Section 122 and in the manner provided for in Section 124. The definition of 'goods' in Section 2(22) of the Customs Act includes currency also. Section 124 is as follows : "Issue of show cause notice before confiscation of goods, etc. The definition of 'goods' in Section 2(22) of the Customs Act includes currency also. Section 124 is as follows : "Issue of show cause notice before confiscation of goods, etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this chapter unless the owner of the goods or such person :- (a) is given a notice in writing infoinung dm of the grounds in which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter : Provided that the notice referred to in Cl.(a) and the representation referred to in Cl. (b) may, at the request of the person concerned be oral.' Similar to Section 41 of the Act, we find Section 110(2) in the Customs Act, which is as follows:" * Where any goods are seized under sub-section (1) and no notice in respect thereof is given under Cl. (a) of Section 124 within 6 months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized." Adjudication proceeding under the Customs Act, therefore, contemplates first show cause notice informing the person about the grounds on which it is proposed to confiscate the goods or impose a penalty, an opportunity for making a representation in writing and an opportunity of being heard in the matter. Section 110(2) of the Customs Act makes it explicit that the goods cannot be retained beyond the period of six months unless meantime, a show cause notice is issued under Section 124(a) of the Customs Act. 13.The contents of the show cause notice contemplated in the two provisions are more or less similar. While under Rule 3(1) of the Rules a show cause has to indicate the nature of the offence alleged to have been committed by him, Section 124(a) of the Customs Act requires the show cause notice to inform the person of the grounds on which it is proposed to confiscate the goods or impose a penalty. While under Rule 3(1) of the Rules a show cause has to indicate the nature of the offence alleged to have been committed by him, Section 124(a) of the Customs Act requires the show cause notice to inform the person of the grounds on which it is proposed to confiscate the goods or impose a penalty. A show cause notice, therefore, in either of these proceedings would contain the factual averments and the other details which would make out the contravention committed by the person which he has to meet. Under the Customs Act, final orders are passed after giving an opportunity for representation and hearing. The Act, however, provides for a stage, when the adjudicating officer could consider the cause shown by the person and if satisfied, could decide to conclude the proceedings and pass final orders under Section 51 of the Act. Such an order passed, even before the stage contemplated under Rule 3(3), is still a final order of adjudication under Section 51 of the Act, deciding not to impose a penalty. In the Customs Act, however, the enquiry is a continuous one, which does not contemplate a stage when the adjudicating officer could accept the explanation and conclude the enquiry, even before proceeding for a personal hearing. All that happens under the Act, after the notice under Rule 3(3) is issued fixing a date for the appearance of the person, is that the adjudicating officer orally explains to the person about the contravention and the person is called upon to produce evidence, either oral or documentary. If the notice under Rule 3(1) is to be construed only as an office memo, as the learned Judge, V. Ramaswami, J., (as he then was) heldR. Sivarajanv. The Deputy Director (Vol.12) 1987 Excise and Customs Cases 256, and the enquiry commences only on notice of hearing under Rule 3(3), then the whole enquiry would only proceed on a mere oral explanation of the offence alleged to have been committed by him. 14.Section 51 calls upon the adjudicating officer to hold an enquiry in the prescribed manner. Rule 3 prescribed the manner. 14.Section 51 calls upon the adjudicating officer to hold an enquiry in the prescribed manner. Rule 3 prescribed the manner. If the enquiry is to commence only from Rule 3(3) stage, there could be no statutory basis for the adjudicating officer to issue notice under Rule 3(1) or decide whether or not to accept the cause shown by the person and pass consequential orders, either dropping the proceedings or continuing the proceedings. 15.We shall now refer to some of the decisions placed before us. As rightly contended by the learned counsel for the respondent, inK.A. Abdul Khaderv. Deputy Director of Enforcement Information Directorate, Madras 1976 AIR(Madras) 233) rendered by V. Ramaswami, J., (as he then was) this question whether adjudication proceedings commence on the notice being issued under Rule 3(1) or whether they commence on a notice under Rule 3(3), had neither been raised nor decided. Learned Judge, while generally analysing the provisions of the Act, has made a passing observation that proceedings commence when a show cause notice is issued. The learned Judge, later inR. Sivarajanv.Deputy Director(Vol.12) 1987 Excise and Customs Cases 256, has gone elaborately into this aspect and has equated the notice under Rule 3(1) to an office memo, issued before disciplinary proceedings are initiated in ordinary civil cases in regard to government servants. With due respect to the learned Judge, we are not inclined to agree with the above view of the learned Judge for the reasons already enumerated above. The decision of the learned Judge inKA. Abdul Khaderv.The Deputy Director of Enforcement Information Directorate, Madras 1976 AIR(Madras) 233) was the subject matter of Writ Appeal in W.A. No. 65 of 1976, wherein even though the question that directly came up for decision was, whether the date to be reckoned with, was the date of issuance of the notice or the date of service of the notice, the Bench also discussed the issue as to when adjudication proceedings under Section 51 of the Act commence, when a show cause notice is issued under Rule 3(1) and the requirements of Section 19(g) (Present section being 41) are satisfied. V. Ramaswami, J. (as he then was) in his later decision inR. Sivarajanv. Deputy Director((Vol. V. Ramaswami, J. (as he then was) in his later decision inR. Sivarajanv. Deputy Director((Vol. 12) 1987 Excise and Customs Cases 256) did not choose to place reliance on the view expressed by the Division Bench on the ground that the point, as raised on the case before him, was not raised before the Division Bench and decided. We, however, agree with the view expressed by the Division Bench in W.A. 65 of 1976. The High Court of Kerala inBhaskaran Pillaiv. Enforcement Directorate, 1978 KLT 436 , has also taken the view that proceedings under Section 51 of the Act commence as soon as show cause notice is issued under Rule 3(1) and not when a notice of hearing is issued under Rule 3(3). We therefore, hold that adjudication proceedings under Section 51 of the Act commence, when a show cause notice is issued by the adjudicating officer under Rule 3(1) and not when a notice of hearing is issued under Rule 3(3). 16.Coming to the admitted facts of the case, the seizure was made on 21-5-1986. Though the learned counsel for the respondent in the end of his submissions, fainly contended that the show cause notice under Rule 3(1) dated 11-5-1987 could not have been issued that day and could have been antedated and the later affixture of the above notice on 11-9-1987 was a force, since the respondent was very much available for direct service, we cannot go into these factual allegations. It has, therefore to be taken, that the notice under Rule 3(1) had been issued on 11-5-1987, that is, within a period of one year from the date of seizure. The appellants, therefore, by virtue of the enabling provisions in Section 41 of the Act, are entitled to retain the currency, until the disposal of the adjudication proceedings, including the proceedings, if any, before, the Appellate Board and the H.C. 17.In the result, the writ appeal is allowed. There will be no order as to costs.