2013 (9) TMI 920 - HC - FEMA

High Court sets 4-month deadline for money seizure investigation, stresses timely completion

The High Court instructed the respondent authorities to promptly conclude the investigation into the seized money, setting a deadline of four months from ... Interference with ongoing investigation - completion of investigation within reasonable time - investigation under FEMA - seizure and inquiry into source of cashInterference with ongoing investigation - investigation under FEMA - Whether the High Court should interfere with the respondent authority's ongoing investigation into the seized cash. - HELD THAT: - The Court declined to grant the substantive relief of directing immediate return of the seized amount while the investigation to ascertain the genuineness of the appellant's explanation remained pending. The judges accepted the respondent authority's position that enquiries were continuing into the provenance of the cash, including the appellant's claim regarding receipt from a third party and the third party's source. Absent completion of that investigation, interference with the investigative process was not warranted. [Paras 2, 3]The Court refused to interfere with the ongoing investigation while enquiries under the FEMA-related probe continue.Completion of investigation within reasonable time - seizure and inquiry into source of cash - Whether the investigating authority must be directed to conclude the investigation within a specified time-frame. - HELD THAT: - Noting that the cash was seized on 09/05/2011 and that the investigation had remained pending for more than a year, the Court held that the Directorate of Enforcement must complete the investigation within a reasonable and definite period. The Court exercised its supervisory jurisdiction to impose a time limit to prevent undue delay, while leaving the merits of the investigation to the authorities to resolve. [Paras 4, 5]Respondents were directed to complete the investigation expeditiously, and in any event within four months from receipt of a copy of the judgment.Final Conclusion: Writ appeal disposed; substantive interference with the ongoing FEMA-related investigation declined, but respondents directed to conclude the investigation expeditiously and not later than four months from receipt of the judgment. Issues:1. Allegation of harassment by respondent authorities for seized money.2. Refusal by Single Judge to interfere with the investigation.3. Pending investigation to ascertain the source of the seized money.4. Delay in completing the investigation.5. Setting a time frame for completing the investigation.Analysis:The appellant raised a grievance against the respondent authority for harassing him despite explaining the source of the seized money. The Single Judge declined to interfere with the ongoing investigation to verify the genuineness of the appellant's claims. The appellant, dissatisfied with this decision, appealed to the High Court.The Assistant Solicitor General informed the court that the investigation was still in progress. The appellant stated receiving the money from an individual named Mr. Binoy, who borrowed it from his mother-in-law in Kerala. The investigation aimed to establish the origin of the money found in the appellant's possession.Despite the money being seized over a year ago, the investigation remained incomplete. The High Court acknowledged the need for a reasonable time frame for investigations involving potential violations of the FEMA Act. While not entirely agreeing with the relief sought by the appellant, the court emphasized the importance of timely completion of investigations by the Directorate of Enforcement.Consequently, the High Court disposed of the appeal by instructing the respondent authorities to conclude the investigation promptly, setting a deadline of four months from the date of receiving a copy of the judgment for its completion.