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Non-appearance before ED an offence under FERA: HC

Our Legal Correspondent

CHENNAI, Dec. 14

THE Madras High Court has held that non-appearance before the Enforcement Directorate on summons would amount to disobedience warranting action under Section 56 of the Foreign Exchange Regulation Act, 1973.

Mr Justice B. Akbar Basha Khadiri, who dismissed a criminal original petition by a Singapore-based NRI challenging the summons issued by the Enforcement Directorate, Chennai, under Section 40(3) of the FERA in respect of the criminal proceedings institut ed under Section 56 of the Act, said, ``Receipt of summons and reply every time that the petitioner is hospitalised certainly lead to a conclusion that the petitioner was evading summons. Evasion to appear before the competent authority would certainly amount to disobedience''.

The petitioner, Mr Muthu Krishna Varadarajulu, an Indian citizen was running business in Singapore. The respondent (Chief Enforcement Officer, Enforcement Directorate, Chennai) and various enforcement agencies conducted raids at the premises of the India n companies which had dealings with the petitioner's company.

In the course of investigation, the respondent sent summons to the petitioner to appear for enquiry. Every time the petitioner sent a reply stating that he was unable to appear before the Enforcement Officer due to health reasons, and each time he had en closed relevant medical certificates issued by the hospitals run by the Singapore Government.

Thereafter, the respondent instituted proceedings under Section 56 of the Act holding that the petitioner had willfully disobeyed the summons, on the basis of which the Additional Chief Metropolitan Magistrate (EO II), Egmore, Chennai issued summons to t he petitioner to appear before the court.

The petitioner had come forward with the present petition before the High Court praying to quash the proceedings, inter alia, contending that there had been no violation of the provisions of Section 40 of the Act, and even otherwise such violation did no t amount to an offence under Section 56 of the Act.

The judge said that in the light of the recent pronouncement of the apex court, which had overruled the decision reported in a case pertaining to non-appearance before the authorities on summons, he had no hesitation to hold that non-appearance before th e respondent after receipt of summons would amount to disobedience warranting action under Section 56 of the Act.

Referring to the contention of the petitioner that he was ill and, hence, could not appear before the authorities, the judge stated that even if the illness alleged was true, with all the diseases when the petitioner was pulling on and probably looking a fter all his business affairs also, it could not be said that he was so much desirable that he could not appear before the Enforcement Authorities at all.

The judge said he was not prepared to accept the contention that the petitioner had not disobeyed the summons.

On the plea raised by the petitioner that warrant issued by an Indian Court for non-compliance of summons could not be executed in Singapore and that offence under the Act was not extraditable, the judge said that such contention would indicate that the mind of the petitioner that he had decided not to appear before the respondent.

Though he had stated that he was prepared to co-operate, his laying conditions that a letter of rogatory should be issued and his statement should be recorded in Singapore appeared to be dictating terms to the respondent as to how they should hold inquir y.

``I am satisfied that a harmonious consideration of the contentions raised by the petitioner itself would go to show that he has no mind to obey the summons. When that is the case, he could not question the action contemplated under Section 56 of the Act ''.

The judge dismissed the petition.