JUDGMENT S.N. JHA, J 1. By judgment and order dated March 11, 1996 this Court directed the Central Bureau of Investigation (CBI) to enquire into the cases of excess drawals and expenditure in the Department of Animal Husbandry in the State of Bihar and lodge cases where drawals are found to be fraudulent, and take the investigation in such cases to its logical end. The Income Tax Department was also directed to initiate such action as may be considered fit, necessary and expedient under the Income Tax Act, Wealth Tax Act, etc. against persons involved in the Animal Husbandry 'Scam'. The earlier part of the order was modified by the Supreme Court to the extent that the CBI was directed to investigate cases already instituted by the State Police. Both the CBI and Income Tax Department have been making investigation and inquiry and submitting status reports from time to time. Later in view of certain facts coming on the record suggesting prima facie violation of the provisions of the Foreign Exchange Regulation Act, 1973 (FERA) the Enforcement Directorate was also directed to make investigation into the concerned cases. 2. On November 6, 1998, on behalf of the Enforcement Directorate Mr. D. Roy Choudhary took the stand that on account of judgment of the Foreign Exchange Regulation Appellate Board (FERA Board) in a batch of cases decided on June 30, 1997 the Directorate has some difficulties in making the inquiry. in cases of 'remittances' made by Non-Resident Indians (NRIs) during the period when the Immunity Scheme under the provisions of the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 (in short the 'Immunities Act') was in vogue. According to the counsel for the Enforcement Directorate the interpretation made by the FERA Board of certain provisions of the Immunities Act is not correct. It is only a Court, meaning thereby the Supreme Court or a High Court, which can interpret the Statute having the force of binding precedent. However, so far as the Directorate is concerned, it is bound by the decision of the FERA Board. Counsel urged that this Court may interpret the relevant provisions of the Immunities Act and give suitable directions so that the Enforcement Directorate may make inquiry into the cases of violations of the Foreign Exchange Regulation Act. However, so far as the Directorate is concerned, it is bound by the decision of the FERA Board. Counsel urged that this Court may interpret the relevant provisions of the Immunities Act and give suitable directions so that the Enforcement Directorate may make inquiry into the cases of violations of the Foreign Exchange Regulation Act. On the request of the counsel, the matter was fixed for hearing on December 4, 1998, on which date it was heard at length. Mr. B.B. Ahuja, learned Senior Counsel appearing for the Income Tax Department also gave valuable assistance to the Court. 3. Although the submission of the counsel for the Enforcement Directorate centered around the above said decision of the FERA Board, as we made it clear to the counsel in course of hearing, in this proceeding we are not supposed to sit in appeal over the decision of the FERA Board. As a matter of fact, we discovered that the decision of the FERA Board has been rendered in a particular fact-situation in which no other interpretation could be possible. It was a case of 'remittance' from a Non-Resident by transfer from his NRE Account in India. In view of the definition of 'remittance' in Section 2(b) of the Immunities Act, the FERA Board held that where remittance is made in Foreign Exchange by any person resident outside India to a person resident in India during the period in question, inter alia, by way of transfer from Non-Resident (External) Account (NRE Account), it would amount to 'remittance' within the meaning of the Immunities Act and would lie outside the scope of inquiry or investigation. The case was decided on its own facts. In the present case the facts are yet to be found. 4. Before proceeding further, it would be apt to point out that Section 8 of the Foreign Exchange Regulation Act puts certain restrictions on dealing in Foreign Exchange. The case was decided on its own facts. In the present case the facts are yet to be found. 4. Before proceeding further, it would be apt to point out that Section 8 of the Foreign Exchange Regulation Act puts certain restrictions on dealing in Foreign Exchange. It lays down, inter alia, that except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer, shall in India purchase or otherwise acquire or borrow from, or sell or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any Foreign Exchange, nor he shall enter into any transaction which provides for the conversion of Indian currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank. Where any foreign exchange is required by any person, 0ther than an authorised dealer or a money changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for that purpose or fail to comply with any condition subject to which permission is granted. Section 9 of the said Act puts similar restriction on payment. This lays down that save as provided in the general or special exemption, no person in, or resident in, India shall (a) make any payment or for the credit of any person resident outside India, (b) receive, otherwise than through an authorised dealer and payment by order or on behalf of any person resident outside India. It is not necessary to refer to the various provisions with their clauses and sub-clauses, for the purposes of this case. Having indicated the nature of the charging provisions of the said Act I would refer to the relevant provisions of the Immunities Act. That being the focal point for consideration, it would be appropriate to quote the relevant provisions of that Act. But before I do so, I must mention that the Act, as its long title and preamble would show, was enacted to provide for certain immunities to persons receiving remittances in foreign exchange and to persons owning the foreign exchange bonds and for certain exemptions from direct taxes in relation to such remittances and bonds and for matter connected therewith or incidental thereto. The Act which came into force on September 18, 1991 was intended to remain operative upto November 30, 1991 but, it appears, the period was extended to January 31, 1992. 5. The Act comprises of only 7 Sections divided into three Chapters. While Chapter-I contains the usual provision regarding the Title and extent of application of the Act, Chapter-II contains provisions relating to remittances of foreign exchange, and Chapter-III contains provisions relating to investments in foreign exchange bonds. In this case we are not concerned with the provisions regarding foreign exchange bonds. The only provisions with which we are concerned are those contained in Sections 2, 3 and 4 of the said Act. While Section 2 is the definition Section, Section 3 is the main charging provision relating to Immunities. Section 4 is in the nature of supplementary provisions. 6. At this stage the relevant provisions of the Immunities Act may be quoted as hereunder:– 2(a) 'Recipient' means a person as defined in clause (31) of Section 2 of the Income-tax Act, 1961 who receives any remittance under this Chapter; (b) 'Remittance' means remittance made in foreign exchange by any person resident outside India to a person resident in India on or after the date of commencement of this Act but before the specified date, in the form of drafts, traveller's cheques, cheques drawn on banks situated outside India, telegraphic transfers, mail transfers, money orders or by way of transfer from Non-resident (External) Account, Foreign Currency Non-resident Account or Foreign Currency Non-resident Special Deposit Account maintained in India under the rules made under the Foreign Exchange Regulation Act, 1973; (c) All other words and expressions used in this Chapter but not defined and defined in the Foreign Exchange Regulation Act, 1973 shall have the meanings respectively assigned to them in that Act. 3. 3. Immunities–(1) Notwithstanding anything contained in any other law for the time being in force:– (a) No recipient, who claims immunity under this Chapter in accordance with such scheme as the Reserve Bank of India may, by notification in the Official Gazette, specify for the purposes of receiving remittances under this Chapter, shall be required to disclose, for any purpose whatsoever the nature and source of the remittance made to him; (b) No inquiry or investigation shall be commenced against the recipient under any such law on the ground that he has received such remittance; (c) The fact that the recipient has received a remittance shall not betaken into account and shall be inadmissible as evidence in any proceedings relating to any offence or the imposition of any penalty under any such law. (2) Nothing in sub-section (1) shall apply:– (a) To any foreign exchange which is required to be brought into India under any of the provisions of:– (i) The Foreign Exchange Regulation Act, 1973, or (ii) The Income-tax Act, 1961, read with the Foreign Exchange Regulation Act, 1973, if the period within which such foreign exchange is to be brought into India has not expired or where such period has been extended, in any manner, by the Central Government or the Reserve Bank of India or any other authority, such extended period has not expired on the date of commencement of this Act; (b) In relation to prosecution for any offence punishable under Chapter IX or Chapter-XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Terrorist and Disruptive Activities (Prevention) Act, 1987, the Prevention of Corruption Act, 1988 or for the purpose of enforcement of any civil liability. (3) The Central Government shall cause the scheme notified under Clause (a) of sub-section (1) to be laid, as soon as may be after it is notified, before each House of Parliament. 7. It would appear that Section 3 which begins with a non-obstante clause and thus overrides any other law for the time being in force, saves recipients claiming immunity under the Act from disclosing for any purpose whatsoever, the nature and source of remittance made to him. It also forbids any inquiry or investigation under any law against the recipients. 7. It would appear that Section 3 which begins with a non-obstante clause and thus overrides any other law for the time being in force, saves recipients claiming immunity under the Act from disclosing for any purpose whatsoever, the nature and source of remittance made to him. It also forbids any inquiry or investigation under any law against the recipients. However, in order to attract the provisions of Section 3 it is necessary that the 'remittance' falls within the ambit of Section 2(b) of the Act. In other words, it must be in foreign exchange by any person resident outside India to a person resident in India. Where the remittance comprises of Indian rupee converted into foreign exchange and later sent by a Non-resident Indian to a person residing in India; the ingredients of Section 2(b) would not be attracted. It may well be that in the, garb of ostensible remittance of foreign exchange, what is in fact remitted is the Indian rupee converted into foreign exchange by a Non- resident Indian. In the case in hand a huge public money of the Animal Husbandry Department has been swindled away and there are reasons to believe that part of the money has gone abroad. It need hardly be emphasised that money can either be spent or kept in liquid form or invested in different forms. It may be mentioned here that although more than a thousand crores of rupees has been swindled, the CBI and the Income tax Department have been able to lay their hands on only part of it. It is reasonably suspected and believed that part of the money has traveled abroad. It would not be strange if the money has again found its way back into India in the shape of foreign exchange. Where any Indian rupee is converted in foreign exchange by a Nonresident Indian (NRI) by one or other means and for consideration, and then remitted to a person resident in India, it cannot be said to be 'remittance' of foreign exchange within the meaning of Section 2(b). Unless investigation is made as to whether the remittance was by a Non-resident Indian or through a Non-resident Indian the truth may never come out. 8. As stated above, Section 3 provides immunity to the recipients of remittance falling under Section 2(b). Unless investigation is made as to whether the remittance was by a Non-resident Indian or through a Non-resident Indian the truth may never come out. 8. As stated above, Section 3 provides immunity to the recipients of remittance falling under Section 2(b). In a case falling under Section 2(b), no inquiry or investigation can be made against him but where the inquiry or investigation is proposed to be made on the point as to whether the amount received by him (recipient) is in fact 'remittance' within the meaning of Section 2(b), I do not think Section 3 would stand as a bar. Any such interpretation would make the provisions of Sections 8 and 9 of the Foreign Exchange Regulation Act redundant. As noticed above, Sections 8 and 9 put certain restrictions on dealing in foreign exchange and payment to a Non-resident Indian. It is only in the course of inquiry that it can be found as to whether the provisions of Sections 8 and 9 of the Foreign Exchange Regulation Act (FERA) have been violated or not. It would be tautology to say that where the provisions of Section 9 of the Foreign Exchange Regulation Act are attracted, those of the Immunities Act would automatically get excluded. If there has been violation of Sections 8 and 9 of the Foreign Exchange Regulation Act, it may not be a case of 'remittance' of foreign exchange by a Non-resident Indian. 9. It is significant that sub-section (2) of Section 3 makes the charging provision of sub-section (1) inapplicable in cases mentioned in clauses (a) and (b) of the sub-section. In other words, the immunity clause shall not stand in the way of prosecution for certain types of offences as mentioned therein including those failing under Chapters IX or XVII of the Indian Penal Code and Prevention of Corruption Act, 1988. 10. Another aspect of the matter is that the inquiry or investigation is barred only against a recipient being a person as defined under Section 2(31) of the Income Tax Act, receiving 'remittance' as defined in Section 2(b) of the Immunities Act. In other words, the person concerned not only should be recipient within the meaning of Section 2(31) of the Income Tax Act but should have also received 'remittance' within the meaning of Section 2(b) of the Immunities Act. In other words, the person concerned not only should be recipient within the meaning of Section 2(31) of the Income Tax Act but should have also received 'remittance' within the meaning of Section 2(b) of the Immunities Act. Where both the conditions are not satisfied, that is to say, the person concerned is not recipient or the remittance in question is not 'remittance' within the meaning of that Act, the bar contained in Section 3(1) will not be attracted. 11. As stated above, the CBI has made a detailed investigation of different cases and so has the Income Tax Department. In my opinion, it would be only proper if the materials collected by them in course of their investigation/enquiry suggesting prima facie violation of the provisions of the Foreign Exchange Regulation Act, are treated as the starting point for making a preliminary inquiry by the Enforcement Directorate. If in course of such preliminary inquiry it transpires that the money in question does not constitute 'remittance' within the meaning of Section 2(b) of the Immunities Act, the Enforcement Directorate will be fully competent to make formal inquiry/investigation against the recipients. In such a case provision of Section 3 would not stand in the way. 12. In the above premises, in my opinion, the contention that the decision of the FERA Board prevents the Enforcement Directorate from making Inquiry does not appear to have any basis. The Enforcement Directorate is directed to proceed further in the light of this order in accordance with law. 13. The matter stands disposed of.