Research › Search › Judgment

Delhi High Court · body

2006 DIGILAW 2396 (DEL)

SUNIL GULATI v. R. K. VOHRA

2006-12-20

A.K.SIKRI

body2006
JUDGMENT A.K. Sikri, J.-All these petitions involve same question of law with almost same factual foundation. Therefore, these are disposed of by this common judgment to avoid repeating the legal position. After restating the legal principles in the first case, each case is dealt with separately. Crl. M.C. No. 2173/2004 & Crl. M. C. No. 991/2004 2. Sh. RK. Vohra, Intelligence Officer of the Directorate Revenue Intelligence (DRI), New Delhi, has filed complaint under Section 135(1)(a) of the Customs Act, 1962 which is pending in the Court of learned Additional Chief Metropolitan Magistrate, Patiala House Court, New Delhi. Petitioner herein is arraigned as accused No. 1. Other accused person is one Mr. Joginder Pal Singh @ Jagmohan Singh. Taking cognizance of this complaint, both the accused persons were summoned by the learned ACMM. On receiving the summons, the petitioner filed application for his discharge which application has been dismissed by the learned ACMM vide order dated 17.2.2004. In fact, other co-accused had also filed similar application and vide the impugned order, both these applications have been dismissed. In these circumstances, petitioner has approached this Court for dismissal of the said complaint. 3. The brief facts, which can be noticed from the reading of the complaint filed by the complainant, are the following: On 27.4.1997, the Officers of the Directorate of Revenue Intelligence (DRI) on the basis of specific intelligence intercepted two persons on platform No. 10 at New Delhi Railway Station namely the petitioner and one Chaman Lai. Upon search of the briefcase as alleged by the complainant, being carried by the petitioner, foreign currency equivalent to Indian Rs. 41,22,050/- was found concealed in a false cavity, which could not be explained by the petitioner and the petitioner was apprehended by the Officers of the DRI. 4. In the statement dated 27/28.4.1997 under Section 108 of the Customs Act, 1967 the petitioner admitted the recovery and seizure and stated that the said currency had been handed over to him by one person named Joginder Pal Singh @ Jagmohan @ Thakur, who had directed him to take it to Calcutta and hand over the briefcase with the currency to Jagmohans contact there. 5. 5. It was also stated by the petitioner that Joginder Pal Singh @ Jagmohan gave his Maruti Zen car bearing No. DL-4C-E-8924 to enable him to drop his father-in-law Shri Chaman Lai the Railway Station since Jagmohan had asked Chaman Lai to go to Calcutta in place of the petitioner and to carry the currency in his behalf. 6. Thereafter, the Officers of the DRI on 28.4.1997 searched residential premises of the petitioner, however nothing incriminating being either foreign currency or gold was found therein. 7. It would be noticed at this stage that when the petitioner was produced before the learned ACMM after his arrest, he retracted his statement under Section 108 of the Customs Act on the ground that this statement had been procured under coercion and under use of third degree methods. However, we are not concerned with this aspect of the matter. The ground on which the petitioner as well as his co-accused sought discharge was that during the pendency of this complaint, an adjudication order was passed by the Commissioner of Customs (General) on 31.3.2000, whereby the foreign currency allegedly seized from the petitioner as also the car belonging to one Joginder Pal Singh @ Jagmohan @ Thakur were confiscated and a personal penalty of Rs. 5 lacs each was imposed on two persons. These two persons had challenged the adjudication order by filing separate appeals before the CEGAT and vide common order dated 1.8.2002, the CEGAT was pleased to set aside and quash the adjudication order on merits. Thus, it is pleaded by the petitioner that since the order of adjudication passed by the adjudicating authority itself is set aside and the CEGAT has recorded the findings in favour of the petitioner, continuation of the proceedings in the instant complaint case filed by the complainant were unjustified, unsustainable inasmuch as these proceedings are on the same allegations contained in the adjudication order and as the petitioner is exonerated in those proceedings. 8. In support of this proposition, learned Counsel for the petitioner referred to the judgment of the Honble Supreme Court in the case of G.L. Didwania & Another v. Income Tax Officer & Another, 1995 Suppl. (2) Supreme Court Cases 724 and also three judgments of this Court in which the same view is taken, particulars whereof are as under: 1. In support of this proposition, learned Counsel for the petitioner referred to the judgment of the Honble Supreme Court in the case of G.L. Didwania & Another v. Income Tax Officer & Another, 1995 Suppl. (2) Supreme Court Cases 724 and also three judgments of this Court in which the same view is taken, particulars whereof are as under: 1. Munna Lal Khandelwal v. B. Hazra, Enforcement Officer & Others, 83 (2000) Delhi Lew Times 395. 2. M/s. Hitech Carbon Products & Anr. v. Inspector, Anti-Evasion, Central Excise, New Delhi, 82 (1999) Delhi Law Times 89. 3. Suhhash Chander Wadhwa v. Neeraj Garg reported in Criminal Revision No. 157/2002. 9. Learned Counsel for the DRI, on the other hand, submitted that proceedings before adjudicating authority are entirely on different footing than the proceedings in the complaint case under Section 135 of the Customs Act, filed in a criminal Court and such adjudication proceedings will have no bearing on the complaint case filed by the DR!. In support of this proposition, he referred to the Constitution Bench of the Honble of Supreme Court in the case of Assistant Collector of Customs v. L.R. Malwani 1999 (110) EL T 317 (SC), and also the Division Bench of the Apex Court in the case of San tram Paper Mills v. Collector of Central Excise, 1997 (96) ELT 19 (SC). He also referred to the judgment of Andhra Pradesh High Court in K. Neealakantha Rao v. State of Andhra Pra1esh, 2000 (122) ELT 7. 10. It may be noted that all the judgments referred to by the petitioner as well as Counsel for the DRI are taken note of by the learned trial Court as well. In addition, the Counsel for DRI has placed strong reliance on a recent judgment of the Honble Supreme Court in the case of Standard Chartered Bank and Others v. DRI, II (2006) SLT 446=1 (2006) CCR 161 (SC)= 2006 (1) JCC 488 . 11. While dismissing the application of the petitioner herein, learned ACMM has observed that perusal of the order passed by CECAT would show that order of seizure of the car and imposition of penalty was set aside because of the reason that petitioner had retracted his statement and, therefore, there was no independent corroboration to his statement. 11. While dismissing the application of the petitioner herein, learned ACMM has observed that perusal of the order passed by CECAT would show that order of seizure of the car and imposition of penalty was set aside because of the reason that petitioner had retracted his statement and, therefore, there was no independent corroboration to his statement. On this basis CECA T had opined the ratio of decision of the Honble Supreme Court in Naresh J. Sukhwani v. Union of India, 1996 (83) ELT 258 (SC) will not be applicable since the petitioner had retracted his statement. However, according to the learned ACMM, statement of the accused under Section 108 of the Customs Act could not be disbelieved merely because retraction had been filed as held by the Honble Supreme Court in the case of K.I. Pavunoy v. Assistant Collector, II (1997) CCR 1 (SC)= (1997) 3 SCC 721 , Hem Raj v. State of Ajmer, AIR 1954 SC 462 , Assistant Collector of C.E. v. Duncan Agro Industries Ltd., VI (2000) SLT 68=III (2000) CCR 116 (SC)=AIR 2000 SC 2001 and Surjeet Singh v. UOI, AIR 1997 SC 256 . In the penalty-made para, after taking note of these judgments, learned ACMM has observed as under: "- "From the aforesaid authorities, it is evident that statement of accused under Section 108 of the Customs Act cannot be disbelieved merely because it has observed as under- Honble Supreme Court in the case of Naresh J. Sukhwani v. Union of India, 1996 (83) ELT 258 (SC), with regard to the Customs Act held that such statement of co-accused is a substantive evidence against the other accused." 12. It is, in this backdrop that I have considered the submissions of the Counsel of the two parties. 13. The first question which needs determination is as to whether the two proceeding - one filed in the criminal Court and other adjudication proceedings - are totally independent and adjudication proceedings will have no bearing on the complaint case. The learned Counsel for the State has strongly relied upon the judgment of Supreme Court in the case of Standard Chartered Bank and Others v. DRI (supra), in support of his plea. Therefore, it would be apt to first discuss this judgment. The learned Counsel for the State has strongly relied upon the judgment of Supreme Court in the case of Standard Chartered Bank and Others v. DRI (supra), in support of his plea. Therefore, it would be apt to first discuss this judgment. It was a case where alleging violation of some provisions of FERA, a show-cause notice was issued by the department as to why adjudication proceedings for imposition of penalty under Sections 50 and 51 of FERA be not initiated against the appellant bank and some of its officers. Further notices under Section 61 of the FERA were also issued giving an opportunity to the bank and its officers of showing that they had the necessary permission from the concerned authority for the transaction involved. Appellant bank filed writ petitions in the Bombay High Court seeking declaration that the relevant provisions of the FERA are unconstitutional being violative to Articles 14 and 21 of Constitution of India. Challenge to the constitutional validity of Sections 50, 51 and 68 of the FERA was rejected by the High Court of Bombay. However, at the same time, it clarified that Section 68(1) of the FERA was not applicable to an adjudication proceedings and it was confined to a prosecution for inner offences under the Act. The bank and the officers filed appeals in the Supreme Court against that part of the order whereby challenge to the constitutionality of the provisions had been dismissed. The UOI also felt aggrieved against other part of the judgment whereby the High Court restricted the application of Section 68(1) of the FERA to only criminal prosecution and also filed appeals. The Supreme Court upheld the decision of the Bombay High Court so far as constitutional validity of the said provisions of the FERA is concerned and thus appeals by the Bank and its officers were dismissed. On the other issue namely applicability of Section 68(1) of the FERA, the Supreme Court held that these provisions were applicable to both adjudication proceedings as well as prosecution for penal offences under the Act. Thus appeals of UOI were allowed. We are not concerned with either of the issues in the present case. 14. However, what is relevant for us is the discussion in the judgment on one of the arguments which was raised by Counsel for the appellant Bank. Thus appeals of UOI were allowed. We are not concerned with either of the issues in the present case. 14. However, what is relevant for us is the discussion in the judgment on one of the arguments which was raised by Counsel for the appellant Bank. The contention was that criminal proceedings under Section 56 of the FERA Act could not be initiated before holding adjudication proceedings in terms of Section 51 of the FERA in the first instance. The submission was that it was incumbent upon the Directorate of Enforcement to first adjudicate in terms of Section 51 of the FERA and if only satisfied, proceed with the prosecution under Section 56 of the said Act. This argument was on the premise that first there have to be findings in the adjudication proceedings about the violation of the provisions of FERA and imposition of penalty and only in the light of those findings in the adjudication for penalty that the Directorate of Enforcement could decide as to whether to impose or not to impose any further punishment under Section 56 of the Act and thus launch prosecution or not. This argument was countered on behalf of Union of India by arguing that adjudication and prosecution are two separate and distinct proceedings with distinct purposes and there was no bar either in FERA or in any other law to an adjudication and prosecution being launched simultaneously in respect of an alleged contravention of FERA. It was argued that for the violation of those provisions both civil and criminal action could be taken under the law criminal action cannot wait till the outcome of the adjudication proceedings as even when penalty was imposed in the adjudication proceedings criminal action was still warranted in view of the provisions in Section 56 of the FERA which commences with the words "Without prejudice to any award of penalty by the Adjudicating Officer under this Act". 15. The Court accepted the argument of the Government and held that a complaint under Section 56 of the FERA can never be said to be premature if it is initiated before the award of the penalty under Section 51 of the Act and such proceedings being independent proceedings can be initiated during the pendency of adjudication proceedings under Section 51 of the FERA. Reading of the judgment, thus, in the manner indicated above, would clearly show that what is decided by the Supreme Court is that since two proceedings are independent, even when the adjudication proceedings are not over, the department was competent to launch criminal proceedings as well, alleging violation on the part of the accused person. 16. However, in the present case, we are not concerned with this question. A fine distinction of the issue involved in the case before the Supreme Court and before us in the present case has to be borne in mind. No doubt, as per the aforesaid judgment of the Supreme Court, adjudication proceedings as well a criminal proceedings can be initiated simultaneously. In fact, for initiating criminal proceedings one does not have to wait for the outcome of adjudication proceedings. Therefore, filing of the criminal proceedings by the department against the petitioner in the instant case cannot be termed as bad in law. However, the question with which we are concerned is the impact of the findings which are recorded on the culmination of adjudication proceedings, on criminal adjudication. To put it in simple words, the issue is, if in the adjudication proceedings the petitioner is exonerated, whether on that basis the petitioner can state that criminal proceedings should also be dropped. Case of the petitioner is that since it is held by the adjudicating authority itself that the petitioner has not committed any violation of FERA provisions, same authority cannot be allowed to continue the criminal proceedings. 17. To find an answer to this question, let me discuss other judgments cited by the learned Counsel for the parties. Santram Paper Mills v. Collector of Central Excise (supra) was a case where the appeal before the Tribunal was decided against the assessee who was facing prosecution as well. Appeal was filed against that order and Supreme Court was concerned a with the validity of the order passed by the Tribunal in the said appeal. Finding no fault with the order of the Tribunal, appeal was dismissed on merits. It is short judgment running in four paragraphs. When it was pointed out that criminal proceedings are also pending, the Court observed as under: "The learned Counsel for the appellant brought to our notice that the appellant is also being prosecuted in a criminal Court. Finding no fault with the order of the Tribunal, appeal was dismissed on merits. It is short judgment running in four paragraphs. When it was pointed out that criminal proceedings are also pending, the Court observed as under: "The learned Counsel for the appellant brought to our notice that the appellant is also being prosecuted in a criminal Court. It is obvious that the said case shall be determined on its own merits and according to law, uninhibited by the findings of the Tribunal." It is clear from the above that concern of the assessee in the said case was that once the appeal decided by the Tribunal against the assessee, criminal Court may not be influenced by the findings of the Tribunal and assuaging this apprehension, the Court clarified that the case in the criminal Court shall be determined on its own merits uninhibited by the findings of the Tribunal. It was thus a reverse situation where the accused was not exonerated in the proceedings before the Tribunal. Rather penalty was imposed in adjudication proceedings and the issue related to its effect on criminal proceedings. 18. In Assistant Collector of Customs v. L.R. Malwani (supra) accused was given benefit of doubt in the departmental adjudication by Collector of Customs. Thereafter prosecution was launched against him alleging that he was a party to smuggling conspiracy. The accused pleaded that after he was exonerated in the departmental adjudication proceedings, there could not have been any prosecution against him. The contention was that findings in the departmental adjudication amounted to res judicata criminal prosecution amounted to double jeopardy and in view of the findings of the Collector of Customs, the department was estopped from filing such a complaint. These contentions were repelled and not accepted by the Supreme Court. Insofar as argument of double jeopardy of Section 403 of Cr.P.C. or Article 20(2) of the Constitution is concerned, the Court opined that proceedings before the Collector of Customs were not in the nature of "prosecution" for an offence and, therefore, there was no question of double jeopardy inasmuch as it was necessary for the accused person to establish that he had been tried by a "Court of competent jurisdiction" for an offence and he is convicted or acquitted of that offence and the said conviction or acquittal is in force. It was held adjudication before a Collector of Customs is not a "prosecution" nor the Collector of Customs a "Court". Argument of estoppel also did not find favour with the Constitution Bench by holding that before an accused can (sic. come) in to aid the rule of estoppel, he must establish that in a previous lawful trial before a competent Court, he has secured a verdict of acquittal which verdict is binding on its prosecutor. 19. K. Neealakantha Rao v. State of Andhra Pradesh (supra) is the judgment of Andhra Pradesh High Court. In that case accused wanted stay of trial till adjudication proceedings were completed. This request was not acceded to on the ground that outcome of the adjudication either way would not bar the criminal prosecution. It would be of interest to note that Andhra Pradesh High Court had taken note of three judgments of this Court which had taken the view that when the criminal prosecution is based on same set of facts and evidence which was before the adjudicating authority, the criminal prosecution would not be maintainable after exoneration in the adjudication proceedings. However, this view of our High Court was not accepted by Andhra Pradesh High Court on the ground that it went contrary to the Supreme Court Judgment in Assistant Collector of Customs v. L.R. Malwani (supra). Para 9 of the judgment in this behalf reads as under: On the other hand, the learned Standing Counsel for the Central Customs and Excise Department Sri Gopalakrishna contends that this view of the Delhi High Court goes contrary to the view expressed by a Constitution Bench of the Supreme Court in the case of Asstt. Customs Collector, Bombay v. L.R. Malwani, 1999 (110) E.L.T. 317 (S.C.)= AIR 1970 SC 962 , and neither stay of the proceedings nor quashing of the proceedings could be ordered under the facts and circumstances of the case." 20. As I shall endeavour to demonstrate the Andhra Pradesh High Court is not correct in its aforesaid analysis and, therefore, I respectfully disagree with its view. For this, explication of the judgments of this Court as referred to by the Andhra Pradesh High Court is necessary. In S.K. Sinha v. Singal & Another, 1987 (30) E.L.T. 900 . As I shall endeavour to demonstrate the Andhra Pradesh High Court is not correct in its aforesaid analysis and, therefore, I respectfully disagree with its view. For this, explication of the judgments of this Court as referred to by the Andhra Pradesh High Court is necessary. In S.K. Sinha v. Singal & Another, 1987 (30) E.L.T. 900 . This Court held that it would be unjust to require the petitioner to go through entire process of prosecution when he was exonerated in the departmental adjudication proceedings. Rational in support of this view is found in the following observations: "In criminal matters the degree of proof required is far more strict. If the departmental authority has no good case, for purposes of adjudication, cannot claim to have a good case for purposes of criminal prosecution, particularly when the prosecution is also based on the same set of facts and evidence. It will be most unjust to require the petitioner to go through the entire process of prosecution in the circumstances of this case." 21. In Willi Lemback v. Rajan Mathur & Another, XI 1992 (3) Crimes 692 after following the judgment in S.K. Sinha v. Singal & Another (supra), the Court expressed a similar view in the following terms: "Admittedly the petitioner is being prosecuted on the same set of facts and circumstances, which were before the Collector of Customs at the time of his verdict he found the appellant to be innocent and exonerated him of the charge of smuggling. It thus does not appeal to the reason as to how the petitioner can be allowed to be prosecuted for the same set of facts and on the basis of the same evidence which were before the appellate authority at the time of adjudication." 22. Again, in Munna Lal Khandelwal v. B. Hazra, Enforcement Officer & Others (supra), it was found that charges in departmental proceedings and criminal proceedings were identical and thus when accused was exonerated in departmental proceedings, there was no ground to continue the criminal proceedings. This view was arrived at by not only referring to the aforesaid two judgments but judgment of the Supreme Court as well. This view was arrived at by not only referring to the aforesaid two judgments but judgment of the Supreme Court as well. We may reproduce the relevant discussion on this issue as contained in the said judgment in paras 6 and 7 thereof: "The question for consideration is whether the prosecution against the petitioners can be sustained in view of the orders passed by the competent authorities exonerating them from the charges in question. Admittedly, all the petitioners have been exonerated by the competent authorities from the charges levelled against them. Learned Counsel for the petitioners contended that the orders passed by the competent authorities have attained finality and since the very basis of the complaint has been knocked out, the petitioners prosecution on the same set of facts and evidence cannot be sustained. Reliance is placed on the decisions in P.S. Rajya v. State of Bihar, 1966 SCC (Cri) 897; Ramesh Kumar v. The State, 1985 Cri. L.J. 681; Uttam Chand & Others v. Income-tax Officer, Central Circle, Amritsar, (1982) 133 LT.R. (909); S.K. Sinha v. S.K. Shingal and Another, IV 1987 (1) Crimes 842 (Delhi); M/s. Jewels of India and Others v. The State and Another, XII 1987 (3) Crimes 754 (Delhi); Harbhajal1 Kaur v. Union of India and Others, 1993 JCC 447 (Delhi); G.L. Oidwania v. Income Tax Officer, 1999 (108) E.L.T. 16 (S.C.); and Hitech Carbon Products & Anr. v. Inspector, Anti-Evasion Central Excise, N.D., 1999 III AD (Cr.) DHC 965 in support of the said contention. Where the departmental authorities, whose task is to ensure strict compliance with the relevant provisions of a Statute are satisfied that there is ex facie no contravention of the provisions of any Act, it would be utterly unjust to force a person to face the ordeal of a trial on the same set of facts and evidence. The least that can be said in the case is that if the department does not feel aggrieved of the order of the Competent Authority and accepts it as final and correct, then I fail to understand as to how on the same set of facts and evidence, the department can foist criminal liability upon a person about whom it has accepted the findings of the adjudication proceedings. That apart in the case of P.S. Rajya v. State of Bihar (supra), it was held that the standard of proof required to establish the guilt in a criminal case is much higher than the standard of proof required to establish the guilt in the departmental proceedings. In the instant case the charges against the petitioners in the department proceedings and in the criminal proceedings are one and the same. If the charges which are identical could not be established against the petitioners in the departmental proceedings, one wonders what is there further to proceed against them in criminal proceedings. Thus, in view of the facts that the petitioners have been exonerated in the departmental proceedings, the very basis of the complaint does not exist and the petitioners prosecution on the same set of facts and evidence cannot be sustained. That being so, there is no prospect of the cases ending in conviction and the valuable time of the trial Court would be wasted for holding the trial only for the purpose of formally completing the procedure to pronounce its conclusion on a future date. In this view of the matter, allowing the criminal proceedings to continue and thereby forcing the petitioners to face the ordeal of a trial would be an abuse of the process of law." Thus there is apparent conflict with the view of this Court and the Andhra Pradesh High Court. Not only I agree with the view expressed by this Court, in my humble opinion the Andhra Pradesh High Court has not appreciated the judgment of the case Assistant Collector of Customs v. L.R. Malwani (supra) in correct perspective. That was a case where in departmental proceedings benefit of doubt was given. The position would be different when there is a clear exoneration, on merits, in the adjudication proceedings. The consistent view taken by this Court, as noticed above, finds support from the judgments of Apex Court as well. 23. One such judgment of the Supreme Court needs to be noted is G.L. Didwania & Another v. Income Tax Officer & Another (supra). It was a case where prosecution was launched against the assessee on the ground that he made false statement in the income tax return filed by him. Assessing authority had held that assessee had intentionally concealed his income. It was a case where prosecution was launched against the assessee on the ground that he made false statement in the income tax return filed by him. Assessing authority had held that assessee had intentionally concealed his income. Assessee filed appeal against the assessment order and Appellate Tribunal set aside the assessment order holding that there was no material to hold that T company belonged to assessee. After this clean chit given by the Appellate Tribunal assessee filed application before the Magistrate to drop the criminal proceedings which was dismissed. His petition under Section 482 of Cr.P.C. before the High Court was also dismissed and in these circumstances he appealed to the Honble Supreme Court. The Honble Supreme Court allowed the appeal holding that sole question was whether the appellant made a false statement regarding the income which according to the assessing authority had escaped assessment. So far as this issue was concerned the finding of the Appellate Tribunal was conclusive and hence the prosecution could not be sustained. For taking this view, the Honble Supreme Court relied upon its earlier judgment in the case of Uttam Chand v. Income Tax Officer, Central Circle, Amritsar, (1982) 2 SCC 543 . 24. Thus on the one hand we have judgments of the Supreme Court in the case of Standard Chartered Bank and Others v. DRI (supra), Assistant Collector of Customs v. L.R. Malwani (supra) and Santram Paper Mills v. Collector of Central Excise (supra) holding that departmental proceedings and criminal cases are two independent proceedings and both can go on simultaneously. On the other hand, we have judgments of the Apex Court in the case of G.L. Didwania & Another v. Income Tax Officer & Another (supra) and Uttam Chand v. Income Tax Officer, Central Circle, Amritsar (supra) taking a view that when there is categorical finding exonerating the person by the Tribunal/departmental proceedings which are conclusive, prosecution cannot sustain. There may appear to be some conflict between the two views expressed in the two sets of judgments. However, a closer scrutiny would reveal that there is no such conflict and in fact these judgments deal with different aspects. 25. The conclusion arrived at by the Andhra Pradesh High Court, in my respectful submission, after relying upon Assistant Collector of Customs v. L.R. Malwani (supra), ratio whereof was misread and ignoring other judgments of the Apex Court would not be correct. 25. The conclusion arrived at by the Andhra Pradesh High Court, in my respectful submission, after relying upon Assistant Collector of Customs v. L.R. Malwani (supra), ratio whereof was misread and ignoring other judgments of the Apex Court would not be correct. What is needed is me harmonious reading of all these judgments as I do not even see any contradiction. In fact, various cases of the Supreme Court, note whereof is taken above, deal with different situations. The principles which can be culled out from the aforesaid judgments, when all these judgments are read out harmoniously, would be the following: 1. On the same violation alleged against a person, if adjudication proceedings as well as criminal proceedings are permissible/ both can be initiated simultaneously. For initiating criminal proceedings one does not have to wait for the outcome of the adjudication proceedings as the two proceedings are independent in nature. 2. The findings in the departmental proceedings would not amount to res judicata and initiation of criminal proceedings in these circumstances can be treated as double jeopardy as they are not in the nature of "prosecution". 3. In case adjudication proceedings are decided against a person who is facing prosecution as well and the Tribunal has also upheld the findings of the adjudicators/ assessing authority, that would have no bearing on the criminal proceedings and the criminal proceedings are to be determined on its own merits in accordance with law, uninhibited by the findings of the Tribunal. It is because of the reason that insofar as criminal action is concerned, it has to be proved as per the strict standards fixed for criminal cases before the criminal Court by producing necessary evidence. 4. In case of converse situation namely where the accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determine whether these criminal proceedings could still continue. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and it is found that allegations are not substantiated at all and the concerned person(s) is are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities them. selves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on merits holding that there is no contravention of the provisions of any Act. 26. After delineating the proposition of the law as settled by the Apex Court in various judgments in the manner aforesaid, let me now consider the facts of this case to find out as to in which category these cases belong to. 27. I have gone through the order passed by CEGAT in the appeal preferred by the petitioner. Perusal of this order would show that petitioner had filed appeal against the common adjudication order whereby Maruti Zen Car bearing Registration No. DL-4C-8924 was confiscated with option to redeem the same on payment of redemption fine of Rs. 3 lacs and personal penalty of Rs. 5 lacs. It was this order passed in the appeal which was challenged before the CEGA T. Order clearly records that foreign currency was recovered from the brief case and the petitioner as well as other co-accused were not claiming the seized currency nor were they challenging the confiscation of the currency. 3 lacs and personal penalty of Rs. 5 lacs. It was this order passed in the appeal which was challenged before the CEGA T. Order clearly records that foreign currency was recovered from the brief case and the petitioner as well as other co-accused were not claiming the seized currency nor were they challenging the confiscation of the currency. This appeal was allowed and imposition of penalty was set aside on the ground that it was based on the solitary statement of Sunil Gulati and even when Sunil Gulati had retracted his statement. The concluding para of the order, thus, reads as under: "The appellants are not claiming the seized currency nor challenging the order of confiscation in respect of the seized currency. The seizure of car and imposition of penalty on the present appellants on the basis of retracted uncorroborated statement of one appellant are not sustainable. Hence, set aside the impugned order and the appeals are allowed." 28. It is thus clear that the exoneration is not on merits. The learned trial Court while rejecting the application of the petitioner for discharge has referred to the judgments of the Supreme Court in cases of K.K. Pavunay v. Assistant Collector, (1997) 3 SCC 721 , Hem Raj v. State of Ajmer (supra), Assistant Collector of C.E. v. Duncan Agro Industries Ltd. (supra) and Surjeet Singh v. UOI (supra) on the basis of which he has observed that the statement of accused recorded under Section 108 of the Customs Act cannot be disbelieved merely because retraction has been filed. After discussing this law, in penalty-made para, the learned trial Court has observed: "From the aforesaid authorities, it is evident that statement of accused under Section 108 of the Customs Act cannot be disbelieved merely because it has been retracted by the accused. Honble Supreme Court in the case of Naresh Sukhwani v. UOI, 1996 (8) E.L.T. 258 (SC) with regard to the statement of co-accused under Section 108 of the Customs Act held that such statement of co-accused is a substantive evidence against the other accused." 29. It is clear from the above that in the departmental proceedings, the petitioner is not exonerated on merits and it would still be open to the Criminal Court as to whether the statement of Sunil Gulati under Section 108 of the Customs Act should be believed or not. It is clear from the above that in the departmental proceedings, the petitioner is not exonerated on merits and it would still be open to the Criminal Court as to whether the statement of Sunil Gulati under Section 108 of the Customs Act should be believed or not. Therefore, the impugned order of the learned trial Court is valid and proper, though the discussion on the issue namely relevance of adjudication proceedings on the criminal cases may not be fully correct which is stated by the learned trial Court in the earlier part of the order. Since the conclusion of the learned trial Court in the impugned order is otherwise proper and meets the legal test, this petition is devoid of merits and is dismissed. Cri. M.C. No. 1183/2004 30. The complaint under Section 135 of the Customs Act entitled "Department of Customs v. Nitup Lama and Others" is filed wherein the case set up is that on 28.1.994, 39 bails of Shahtoosh and Pashmina weighing 3353.3 kgs. were seized by the officers of Customs Department from the god own located at G-44, Lawrence Road, Delhi and 15, Community Centre, Wardhaman, Naya Bazar Complex, Lawrence Road Industrial Area, Delhi. The allegations against the petitioner are that he assisted in the smuggling of the aforesaid goods into India by declaring them as" Nepali Mountain Goat Hair". On the seizure of these goods department also initiated departmental proceedings. Commissioner of Customs, Pama, passed order dated 2.8.99 holding that the petitioner had abetted/assisted in the smuggling of the goods into India by mis-declaring them. Aggrieved by this order, the petitioner preferred appeal before the CEGA T at Calcutta. This appeal has been allowed vide order dated 20.10.2000. After the exoneration by the CEGA T, the petitioner filed application for discharge which has been dismissed by the learned ACMM vide order dated 6.12.2003, in view of the judgment, K. Neealakantha Rao v. State of Andhra Pradesh (supra) of the Andhra Pradesh High Court with which I have differed. The proper course, as mentioned above, would be to see the order of CEGA T to find out whether there is an exoneration of the petitioner on merits on the same set of facts. 31. The proper course, as mentioned above, would be to see the order of CEGA T to find out whether there is an exoneration of the petitioner on merits on the same set of facts. 31. Reading of the order of CEGAT would show that the petitioner had not challenged the confiscation of the material as he was not concerned with the same but had challenged the imposition of penalties. Case of the petitioner was that he was a Customs House Agent. He had filed the bill of entry on behalf of the importers in terms of the description of the books as given in the relevant papers. He had also submitted that on the basis of the declaration filed by him Customs House cleared the goods and his responsibility ceased thereafter. While setting aside the penalty imposed upon the petitioner; the Tribunal recorded the following reasons: "As regards the imposition of personal penalty on Shri Naresh Kumar Mittal, we find that he is a Customs Clearing Agent and had filed the bill of entry describing Shahtoosh and Pashmina Raw Wool as Nepalese Mountain Goat hair. From the description given in the import documents, we find that the goods had been described as Nepalese Mountain Goat-hair, which had been picked by the Customs House Agent. The Adjudicating Authority has observed that as a Customs Agent, it was the responsibility of the appellant to give the correct identity/description of the goods in the document namely, the bill of entry, before presenting the same before the Customs Authorities. Accordingly, he has observed that the appellant is responsible for the act of mis-declaration. It has been argued before us by Mr. K.K. Banerjee, learned Advocate for Naresh Kumar Mittal, that the appellant could only identify the goods from the description given in the import papers. It is not possible to examine the goods with naked eye and find out whether the said goods were Shahtoosh Shawls and not Goat-hair. He submits that if that would have been possible, why the Customs Authorities cleared the goods by accepting the same to be Goat-hair. We fully agree with the above argument of the learned Advocate. The Tribunal in the case of Collector of Customs v. Trivandrum Rubber Works Ltd., reported in 1992 (62) ELT-360 (Tribunal) has observed that the clearing agent has no further function to discharge after removal of the goods from Customs station. We fully agree with the above argument of the learned Advocate. The Tribunal in the case of Collector of Customs v. Trivandrum Rubber Works Ltd., reported in 1992 (62) ELT-360 (Tribunal) has observed that the clearing agent has no further function to discharge after removal of the goods from Customs station. He cannot be treated as an agent for all time to come even after the goods have been cleared. Inasmuch as there is nothing on record to show that the goods in question were declared by the said clearing agent by adopting the description different than the one given in the import documents; we find no justification for imposition of penalty upon him. It is also seen that the Nepalese Mountain Goat-hair in the certificate issued by them. Accordingly, we set aside the imposition of personal penalty upon him." 32. It is clear from the complaint that the charge of abetment against the petitioner is on the ground that he was Customs Clearing Agent and had filed the bill of entry himself declaring the goods and, therefore, he abetted with the importers for the smuggling of the goods by giving himself descriptions. 33. The Tribunal returned the findings that as Customs Clearing Agent, the petitioner could only identify the goods from the description given at the import papers and it was not possible to examine the goods with naked eye and find out as to whether the goods were Shahtoosh Shawls and not Goat-hair. There was nothing on record to show that he had given the description different from the one given in the import documents. On this ground the imposition of penalty was set aside. Once such a finding is given, and if these facts are taken on record, obviously the charge of abetment against the petitioner also cannot be made out as that is on the same facts on the basis of which penalty was imposed and which has been set aside by the CEGAT Therefore, this would be a case where after exoneration - of the petitioner by the CEGAT on merits, prosecution against the petitioner cannot continue on the same allegations and facts. The impugned order of the learned trial Court is accordingly set aside and the petitioner is discharged in the complaint. 34. The impugned order of the learned trial Court is accordingly set aside and the petitioner is discharged in the complaint. 34. In this case complaint is filed against the petitioners by the Chief Enforcement Officer, Enforcement Directorate, alleging contravention of Sections 18(2) read with Section 18(3) of the Foreign Exchange Regulation Act (hereinafter referred to as Act). Primarily, the allegation is that the petitioner No.1 company, which is now under liquidation, failed to realise the export proceeds within the stipulated period of time and failed to initiate reasonable steps to realise the said proceeds. During the period between 1994 to 1998 it had effected shipment of goods valued at US $ 737035.97 under the cover of GR forms. This amount was not released wi thin the prescribed period or time extended by the Reserve Bank of India in the prescribed manner by taking concrete steps. It is further stated in the complaint that since the offence has been committed by the company, all the Directors in terms of Section 68 of the Act are responsible for the offence committed by the company. In this complaint summoning orders were issued. Thereafter, petitioners moved application for discharge for dropping the proceedings initiated against the petitioners had been dropped which proceedings were initiated on identical facts. This application has been dismissed by the learned trial Court vide order dated 19.4.2005 and challenging this order the present petition is filed in which prayer is made for quashing proceedings and setting aside summoning orders as well as order dated 19.4.2005 dismissing the application of the petitioners. It may be mentioned at the outset that though the petitioners have taken few other grounds as well on the basis of which petitioners want quashing of the proceedings, the main ground pressed at the time of arguments was that the subject matter of the captioned complaint was identical and similar to the subject matter of the adjudication proceedings pending before the Special Directorate which have been dropped and, therefore, proceedings in the complaint cannot continue against the petitioners. The perusal of the impugned order would show that only on the ground that the proceedings before the adjudicating body are different from the criminal proceedings, application of the petitioners was dismissed. The perusal of the impugned order would show that only on the ground that the proceedings before the adjudicating body are different from the criminal proceedings, application of the petitioners was dismissed. While holding so reliance was also placed on the judgment of K. Neealakantha Rao v. State of Andhra Pradesh (supra), though the Andhra Pradesh High Court in the said judgment has differed from the view taken by this Court. There is otherwise no discussion on the nature of the proceedings before the Adjudicating Authorities and reasons for dropping the same. Though it is this aspect which is to be seen in view of the position in law stated above. Order dated 30.6.2004 passed by Special Directorate of Enforcement would show that order is passed under the provisions of Foreign. Exchange Regulation Act, 1973 read with Sections 49(3) and 49(4) of the Foreign Exchange Management Act, 1999. These proceedings originate from memorandum dated 9.4.2001 issued by Special Directorate of Enforcement to the petitioners alleging contravention of the provisions of Section 18(2) of the Foreign Exchange-Regulation Act, 1973 read with Central Government Notification No. F-1/67/EC/731 & 3 both dated 1.1.1974. Allegation was that the petitioner No. 1 company effected shipment of goods valued at US $ 7,37,035.97 under the cover of 46 GR Forms as between the years 1994 to 1998. Investigation had revealed that petitioner No.1 without any permission from the RBI took or refrained from taking action which had the effect of securing that the export value to the aforesaid extent in respect of the aforesaid goods had not been• b received in India. Perusal of the order would show that the petitioner was charged with following: "Charge On Conclusion of investigations; a Memorandum was issued to the said noticees referred to hereinabove by their taking action/refraining from taking action without any permission of the RBI, which had the effect of securing that the payment for the goods (receipt of the export value of the goods) exported to the tune of US $ 7,37,035.97 has not been received in India within the prescribed period or the period extended by the RBI in contravention of the provisions of Section 18(2) of FERA, 1973 read with Central Government Notification No. J F-1/67/EC/73-1 & 3 both dated 1.1.73 and Section 18(3) ibid." 35. The defence of the petitioners was that the petitioner No.1 company had suffered huge losses and, therefore, it filed a reference before the BIFR under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 and was declared a sick company. They also submitted the reasons for non-realisation and efforts taken by them for realisation of export proceeds. In respect of certain directors, it was stated that they never looked and were not responsible to realise export proceeds. After hearing the arguments of both the parties, the Special Directorate who passed the orders took into consideration the, reasons given for non-realisation and the various steps taken which are mentioned in detail in the said order and concluded as under: . "In view of above, it is clear that the noticees have taken reasonable steps on the basis of which after having been satisfied the noticee company has been granted write off by RBI/banks and wherever the noticee company availed export incentives (Duty Drawback) they furnished evidence of surrender of the same. Therefore, I do not hold the noticees guilty of contravention of the provisions of Section 18(2) of the FERA, 1973 read with Central Government Notification Nos. F-1/67/EC/73-1 & 3 both dated 1.1.1974 and Section 18(3) of the FERA 1973. I pass order as under: ORDER I drop the proceedings initiated against all the noticees in the said SCN for reasons recorded hereinabove." 36. It is clear from the above that the departmental proceedings were initiated alleging violation of the same provisions of FERA in respect of same shipments of same amount with same allegations which are in the complaint namely non-realisation of the export proceeds and not taking effective steps. Therefore, the Adjudicating Authority, being convinced and satisfied with the explanation of the petitioners, dropped the proceedings. It is also recorded that the Reserve Bank of India has itself granted write/off to the petitioner No.1 company. Once the Reserve Bank of India has accepted the explanation and has granted permission to write off and on that basis adjudication proceedings are also dropped, I fail to understand as to how prosecution alleging the violation of same provisions can continue Special Directorate of Enforcement itself has satisfied himself that there is no violation. Chief Enforcement Officer in the Enforcement Directorate, in these circumstances, cannot maintain the proceedings alleging same violation and continue with the complaint. Chief Enforcement Officer in the Enforcement Directorate, in these circumstances, cannot maintain the proceedings alleging same violation and continue with the complaint. It would be of interest to note that Section 18(2) of the Act spells out the circumstances under which the contravention can be said to have been committed so as to attract the penal provisions in addition to proving that export proceeds have not been realised. It is also to be shown that needful is not done within the prescribed period of time or extended period of time granted by the Reserve Bank of India. Rule 8 of the aforesaid Regulation Rules empowers Reserve Bank of India to extend the period of time as prescribed in the Act for realising the export proceeds. Further proviso to Sub-section (2) of Section 18 in no uncertain terms stipulates that no proceedings in respect of any contravention of the provisions of the said sub-section shall be instituted unless the prescribed period has expired and payment for the goods representing the full export value has not been made in the prescribed manner within the prescribed period. Thus, if the RBI itself has granted the extension or has ultimately waived the requirement, there cannot be any infraction of the said proceedings. In the case of LIC of India v. Escorts Ltd., AIR. 1986 SC 1370/ the Supreme Court emphasised this role of RBI in the following manner: "the provisions of FERA are so structured and woven so as to make it clear that it is for RBI alone to consider whether the requirements of the provisions of the Act and the various Rules, directions and orders issued from time-to-time has been fulfilled. ........Under the Scheme of the Act it is the RBI which is constituted and entrusted with the task of conserving and regulating foreign exchange. If one may use such expression, it is the "Custodian General" of Foreign Ex change. The task of enforcement is left to the Directorate of Enforcement but it is the RBI and RBI alone that has to decide whether permission is to be granted or not. The Act makes it its exclusive privilege and function. No other authority is vested with any power nor it may assume to itself the power to decide the question......" 37. The Act makes it its exclusive privilege and function. No other authority is vested with any power nor it may assume to itself the power to decide the question......" 37. In view of the aforesaid legal position where RBI has itself waived and allowed the petitioner No. 1 to write off the realising of the export proceeds and on that basis when Department has itself dropped adjudication proceedings, the criminal proceedings against the petitioners are also required to be closed. This petition is accordingly allowed. The summoning order dated 28.5.2002 is quashed and impugned order dated 19.4.2005 is set aside and the complaint is dismissed against the petitioners. Ordered accordingly.