Non-compliance with summons under foreign exchange law is punishable as contravention, and quashing was refused.

Failure to comply with a summons issued under section 40 of the Foreign Exchange Regulation Act, 1973 was treated as a contravention of a direction issued under the Act and therefore punishable under section 56(1)(ii), even where no ascertainable monetary value was involved. The court held that non-appearance in response to such summons fell within the penal scheme of section 56, and declined to accept the contention that the matter should instead proceed only under section 174 of the Indian Penal Code, 1860. Claims of illness or other factual defences were considered matters for trial, and the existence of prima facie material justified cognizance; the quashing petition was dismissed.

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Issues: Whether failure to appear in compliance with summons issued under section 40 of the Foreign Exchange Regulation Act, 1973 is punishable under section 56 of that Act, and whether the criminal proceedings could be quashed under section 482 of the Code of Criminal Procedure, 1898.

Analysis: Section 40 obliges a person summoned by the Enforcement authority to attend personally and answer questions or produce documents. Non-appearance in obedience to such summons amounts to contravention of the directions issued under the Act. Section 56(1) penalises contravention of any provision of the Act or of any rule, direction or order made thereunder, and clause (ii) applies to cases not covered by clause (i) even where no monetary value is involved. The court declined to follow the contrary view expressed in certain other High Court decisions and held that disobedience of summons under section 40 falls within section 56(1)(ii). The plea that the petitioner was unwell, not concerned with the underlying investigation, or should have been proceeded against under section 174 of the Indian Penal Code, 1860 was treated as a defence to be considered at trial and not a ground for quashing at the threshold. The existence of prima facie material justified the taking of cognizance.

Conclusion: The proceedings were held not liable to be quashed, and the petition was dismissed.

Ratio Decidendi: Contravention of a summons issued under section 40 of the Foreign Exchange Regulation Act, 1973 is punishable under section 56(1)(ii) even if the contravention does not involve any ascertainable amount or value.

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