Statutory time limit on retention of seized currency under foreign exchange law required return when proceedings were not begun in time.

Indian currency seized under the Foreign Exchange Regulation Act, 1973 was treated as a document for Sections 33, 34 and 36 to 41. The Act allowed retention of such seized material for no more than one year unless proceedings under Section 51 or Section 56 were commenced before that period expired. The text states that no such proceedings were started within one year, and a later show cause notice did not cure the defect. Section 53(1)(b) did not extend the retention power, and the Customs Act could not override the Act's express time limit. On that reasoning, continued retention beyond one year was unlawful and return of the currency was warranted.

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Issues: Whether currency seized under the Foreign Exchange Regulation Act, 1973 could be retained beyond one year without commencement of proceedings under the Act, and whether the petitioner was entitled to its return by mandamus.

Analysis: By virtue of the explanation to Section 33, Indian currency was treated as a document for the purposes of Sections 33, 34 and 36 to 41 of the Foreign Exchange Regulation Act, 1973. Section 41 permitted retention of such seized document only for a period not exceeding one year unless, before expiry of that period, proceedings under Section 51 or Section 56 had been commenced. No such proceedings were commenced within one year from the seizure. The later issue of show cause notice could not justify continued retention. Section 53(1)(b) did not enlarge the power of retention under Section 41, and the position under the Customs Act did not alter the express statutory limitation governing retention under the Act.

Conclusion: The retention of the seized currency beyond one year was illegal, and the petitioner was entitled to its return.

Final Conclusion: The writ petition succeeded, with directions to complete the initiated proceedings within the time fixed by the Court and thereafter return the seized currency to the petitioner.

Ratio Decidendi: Where a statute permits retention of seized documents only for a fixed period unless specified proceedings are commenced within that period, continued retention after expiry of the statutory period without compliance with those conditions is unlawful and the property must be restored.

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