1997 (9) TMI 458 - SC - Companies Law

Supreme Court Upholds Summons Issuance Decision

C. Sampath Kumar Versus Enforcement Officer

The Supreme Court upheld the decision of the High Court regarding the issuance of summons under section 40 of the Foreign Exchange Regulation Act, 1973 ... Issuance of summons challenged - Held that:- Appeal dismissed. Despite giving opportunities to the appellant to file copies of those statements in this court to satisfy ourselves whether there was any element of 'compulsion' visible from those statements, copies of those statements have been withheld for reasons best known to the appellant. As a matter of fact, copies of those statements ought to have been filed with the special leave petition itself. It is, therefore, not possible for us to assume that any 'compulsion' was exercised by the respondent to force the appellant to give his statements in writing. Administration of caution to the person summoned under section 40 of the FERA that not making a truthful statement would be an offence cannot by any stretch of imagination be construed as use of 'pressure' to 'extract' the statement. Issues:- Challenge against the issuance of summons under section 40 of the Foreign Exchange Regulation Act, 1973 (FERA).- Whether the appellant can be compelled to give a statement in writing in connection with an offence under FERA.- Allegation of statements being extracted under compulsion.- Withholding of copies of statements by the appellant.Analysis:The appeal in question was brought against the judgment of the High Court regarding the issuance of summons under section 40 of FERA to the appellant. The appellant challenged the summons, contending that he cannot be compelled to provide a written statement in connection with an offence under FERA. The High Court dismissed the writ petition, leading the appellant to file a writ appeal, which was also dismissed. The Supreme Court heard arguments from both parties and examined the issue at hand.The Supreme Court acknowledged that the appellant's statements were recorded on multiple occasions by the respondent as part of the investigation. It was noted that the appellant did not dispute the legality of being asked to provide a written statement under section 40 of FERA. The Court cited the case of Amba Lal v. Union of India, emphasizing the importance of recording statements in writing to safeguard the interests of both the individual and the authorities.The appellant alleged that the statements were extracted under compulsion, a claim denied by the respondents. Despite requests for copies of the statements to assess any signs of compulsion, the appellant withheld them without valid reasons. The Court highlighted that cautioning the summoned individual about the consequences of not providing truthful statements is not equivalent to exerting pressure or compulsion. Such caution is deemed necessary under the statutory provisions of FERA.Ultimately, the Supreme Court found no merit in the appellant's arguments and upheld the decision of the High Court. The appeal was dismissed, and the appellant was directed to pay costs. The interim direction was vacated, emphasizing the importance of cooperation in investigations under FERA.