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2003 DIGILAW 1964 (MAD)

S. Hema v. The Union of India & Another

2003-12-01

FAKKIR MOHAMED IBRAHIM KALIFULLA

body2003
Judgment :- The petitioner seeks for the issuance of a Writ of Mandamus, directing the second respondent to return the documents and Indian Currency recovered on 22.12.1997 from the petitioner’s residential premises at No.15, Lalithapuram Street, Royapettah, Chennai – 14. 2. Under mahazar dated 22.12.1997, seizure of Indian Currency to the value of Rs.4,92,000/-of different denominations came to be made pursuant to a search made under Sections 37 and 38 of The Foreign Exchange Regulation Act, 1973 (hereinafter referred to as “the Act”) in the residential premises of the petitioner and her husband Thiru. S.Rajendran situated at Door No.15, Lalithapuram Street, Royapettah, Chennai – 14. In the seizure mahazar dated 22.12.1997, the petitioner as well as the witnesses affixed their signatures in proof of the search having been made and the seizure thereafter. The contention of the petitioner is that pursuant to the search made under Section 37 of the Act, by virtue of Section 41 of the Act, in the absence of proper extension of time for the retention of the seized documents, the respondents are bound to return the Indian currency to the value of Rs.4,92,000/- seized from her residential premises. The above submission was made on the premise that admittedly there was no extension of time after the initial period of six months from the date of seizure viz., 22.12.1997. 3. The claim of the petitioner was resisted at the instance of the respondents by Mr. The above submission was made on the premise that admittedly there was no extension of time after the initial period of six months from the date of seizure viz., 22.12.1997. 3. The claim of the petitioner was resisted at the instance of the respondents by Mr. K.Kumar, learned Additional Central Government Standing Counsel appearing for the respondents by contending that the present seizure under the seizure mahazar dated 22.12.1997 was not an isolated one, but was relatable to various other seizures which came to be made as against the petitioner’s husband along with the petitioner at different places by way of simultaneous search under Section 37 of the Act, that though no specific time extension was not ordered in respect of the present seizure involved in this writ petition, in respect of the other seizures, necessary notices were issued on 18.06.1998 in exercise of the power vested with the second respondent under the Proviso to Section 41 of the Act, that subsequently in respect of all the seizures made, including the one involved in this writ petition, adjudication proceedings also commenced under show cause notice dated 21.12.1998 and the adjudication proceedings have also ended in the levy of penalty on all the persons including the petitioner and her husband. 4. Learned Standing Counsel for the respondents would state that by virtue of the commencement of the adjudication proceedings under Section 51 of the Act and the ultimate order which came to be passed in the said proceedings, the remedy available to the petitioner is only by way of an appeal under Section 54 of the Act and it would be wholly inequitable to order for the release of the seized moneies on the technical plea raised on behalf of the petitioner, that the seizure was not covered by valid extension of time. 5. Having heard learned counsel for both the parties, I am of the considered view that the stand of the respondents deserves acceptance. 5. Having heard learned counsel for both the parties, I am of the considered view that the stand of the respondents deserves acceptance. A reading of Section 41 of the Act including the proviso to said Section, as well as, the explanation to it makes it clear that while it is required that once seizure is made, such seizure would be initially protected for a period of six months and before the expiry of the said period necessary adjudicatory proceedings under Section 51, if commenced would await the outcome of such adjudication proceedings as well as the subsequent proceedings before the Appellate Board as well as the High Court, the proviso to Section, however enables the second respondent herein to extend the time of retention of seized documents, for a further period not exceeding six more months. But, the expressions used in Section 41 of the Act makes it clear that in either case it has not been mandatorily stipulated that such retention, if not extended within the initial period of six months, would result in the refund of the seized documents without anything more, especially in a case like this, where the respondents commenced the proceedings under Section 51 of the Act, by issuing a notice to that effect on 21.12.1998. I am of the view that in such a situation, Section 51 of the Act would automatically come into play and would substantially protect the retention of the seized Indian currency to the value of Rs.4,92,000/- awaiting the outcome of such adjudication and upto its final conclusion. In the case on hand, the notice dated 21.12.1998 specifically referred to the present seizure mahazar dated 22.12.1997 and the ultimate adjudication order dated 31.10.2003 also specifically dealt with the present seizure mahazar covered by the proceedings dated 21.12.1998 in F.No.T-4/26-M/98(SCN-VI), which has ended in the imposition of a penalty of Rs.10 crores imposed on one M/s. Rahim Travel Services and a sum of Rs.2,50,000/- on the petitioner herself and another sum of Rs.5 crores on her husband Thiru. S. Rajendran. 6. In such circumstances, it is difficult to accept the claim of the petitioner that the non-extension of time after the initial seizure dated 22.12.1997 by passing appropriate order to that effect under the proviso to Section 41 of the Act would ipso facto render the respondents liable to refund the seized Indian Currency of Rs.4,92,000/-. S. Rajendran. 6. In such circumstances, it is difficult to accept the claim of the petitioner that the non-extension of time after the initial seizure dated 22.12.1997 by passing appropriate order to that effect under the proviso to Section 41 of the Act would ipso facto render the respondents liable to refund the seized Indian Currency of Rs.4,92,000/-. Reliance placed on the decision reported in S. MOHANRAJ ..VS.. DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE, MADRAS (1995 (75) E.L.T 251 (MAD))has no application inasmuch as in the said judgment, there was no subsequent adjudication stated to have been involved. 7. In the circumstances, I do not find any merits in this writ petition. Accordingly, the writ petition fails and the same is dismissed. No costs.