Suppressed material facts and missing supporting documents can vitiate FERA prosecution and justify quashing of complaint proceedings

A criminal complaint under FERA was quashed where the allegations were materially altered after the show-cause stage, with consent and connivance later deleted but reintroduced in the complaint, while the appellant's reply and other supporting material were omitted. The absence of original documents and the suppression of relevant facts vitiated the foundation for cognizance. Although negligence could in principle be examined separately, the prosecution was held not sustainable on the facts disclosed, and the complaint proceedings were set aside.

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Issues: Whether the criminal complaint and consequential proceedings under the Foreign Exchange Regulation Act, 1973 against the appellant were liable to be quashed in view of the deletion of the allegations of consent and connivance, suppression and omission of material facts in the complaint, and the absence of supporting original documents.

Analysis: The complaint had originally been preceded by a show cause notice alleging contravention of sections 6(4) and 6(5) read with section 49 of the Foreign Exchange Regulation Act, 1973 on the basis of consent, connivance and negligence, but the allegations of consent and connivance had later been deleted. Despite that, the complaint reintroduced all three allegations and also omitted the appellant's reply to the opportunity notice. No original supporting document was enclosed to substantiate the complaint. In these circumstances, the foundation for cognizance was found to be vitiated. Although negligence could, in principle, be examined independently, the prosecution, on the facts disclosed, was held not sustainable in law.

Conclusion: The complaint proceedings against the appellant were quashed.

Ratio Decidendi: Where a criminal complaint under FERA is founded on suppressed or materially incomplete facts and lacks proper supporting material, the resulting prosecution is liable to be quashed even if one component of the allegation could otherwise be examined independently.

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