Noncognizable foreign exchange offences under the Act are nonbailable where no statutory bail mechanism exists.

Offences under the Foreign Exchange Regulation Act, 1973 that are declared noncognizable but punishable with imprisonment up to seven years are treated as nonbailable. The text distinguishes the Act from the Central Excise Act, 1944, noting that the latter contained an express bail and forwarding mechanism for arrested persons, while the Foreign Exchange Regulation Act contains no comparable provision. Section 35 authorises arrest, and Section 62 makes the offences noncognizable, but neither provision creates a bail scheme. In the absence of an express or implied statutory bail mechanism, the classification in the Second Part of Schedule I to the Code of Criminal Procedure, 1973 applies, resulting in nonbailable treatment.

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Issues: Whether offences punishable under the Foreign Exchange Regulation Act, 1973, which are deemed noncognizable under Section 62 and carry punishment extending up to seven years, are bailable or nonbailable.

Analysis: The relevant provisions of the Foreign Exchange Regulation Act, 1973 were compared with the scheme of the Central Excise Act, 1944 and the Code of Criminal Procedure, 1973. The Central Excise Act contained an express statutory mechanism for forwarding arrested persons and granting bail, which led to the conclusion that those offences were bailable. The Foreign Exchange Regulation Act, by contrast, contained no similar provision requiring release on bail or directing the officer to forward the arrested person for bail in the same manner. Section 35 empowered arrest and conferred powers akin to the officer in charge of a police station, but Section 62 only declared the offences noncognizable and did not make them bailable. In the absence of an express or implied bail scheme comparable to the Central Excise Act, the classification under the Second Part of Schedule I to the Code of Criminal Procedure, 1973 applied.

Conclusion: Offences under the Foreign Exchange Regulation Act, 1973 punishable with imprisonment extending up to seven years are nonbailable.

Ratio Decidendi: Where a special statute declares an offence noncognizable but does not provide a bail mechanism comparable to the Code-based or statute-based bail scheme, the offence remains nonbailable if it falls within the nonbailable category under the First Schedule to the Code of Criminal Procedure, 1973.

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