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of <h1>Court quashes prosecution post exoneration in FERA case, cites abuse of process.</h1> <h3>Raichand C. Jain Versus Surendra Prasad</h3> The court held that the continuation of criminal prosecution after exoneration in adjudication proceedings under FERA would constitute an abuse of ... - Issues Involved:1. Whether exoneration in adjudication proceedings under FERA bars criminal prosecution for the same alleged offences.2. Whether criminal and adjudication proceedings under FERA are independent of each other.3. Whether continuation of criminal prosecution after exoneration in adjudication proceedings constitutes an abuse of the process of the court.Issue-Wise Detailed Analysis:1. Exoneration in Adjudication Proceedings and Bar on Criminal Prosecution:The core issue in these applications is whether exoneration of the applicants in adjudication proceedings under the Foreign Exchange Regulation Act (FERA) would bar their prosecution for offences punishable under the same enactment. The applicants argued that since they were exonerated by the Special Director of Enforcement in the adjudication proceedings, the criminal prosecution based on the same set of facts should be quashed. They relied on various judgments, including Uttam Chand v. Income Tax Officer and K.C. Builders v. Assistant Commissioner of Income Tax, to support their contention that continuation of criminal proceedings would be an abuse of process.2. Independence of Criminal and Adjudication Proceedings:The respondents argued that criminal and adjudication proceedings are independent of each other. They emphasized that adjudication is for the ascertainment of monetary loss and imposition of penalties, while criminal prosecution is for punishing offences. The courts below upheld this view, stating that the findings of the adjudicating authority are not binding on the criminal court. They relied on the Supreme Court's decision in Maqbool Hussain v. State of Bombay, which held that adjudication proceedings do not amount to prosecution and orders passed therein do not amount to punishment.3. Abuse of Process of Court:The applicants contended that allowing criminal prosecution to continue after exoneration in adjudication proceedings would be an abuse of the process of the court. They argued that the same set of allegations and evidence were considered in both proceedings, and the adjudicating authority had found no corroboration for the charges. The court noted that the Special Director had exonerated the applicants after considering the entire material, including retracted statements and lack of corroborative evidence. The court also referred to the Supreme Court's observations in P. Jayappan v. S.K. Perumal, which stated that while criminal and adjudication proceedings can go on simultaneously, continuation of criminal proceedings after exoneration in adjudication could be an abuse of process.Conclusion:The court concluded that in the present case, the continuation of criminal prosecution would be an abuse of process. It noted that the same materials were relied upon in both proceedings, and the adjudicating authority had conclusively exonerated the applicants. The court exercised its inherent powers under Section 482 of the Cr.P.C. to quash the criminal proceedings, emphasizing that no useful purpose would be served by allowing the prosecution to continue on the same set of charges. The court made the rule absolute in each of the petitions, quashing the criminal proceedings as prayed for by the applicants.
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