Mandatory retention limit for seized documents requires timely adjudication before documents can be kept beyond the statutory period

Documents seized under the Foreign Exchange Regulation Act could not be retained beyond the statutory one-year period unless adjudication proceedings were commenced within that time. The retention limit was treated as mandatory, so continued custody after expiry of the period was not justified where no proceedings under the relevant adjudication provision had begun. The authority was required to return the documents on expiry of the prescribed time, and any extension of that retention period would require legislative amendment rather than administrative discretion.

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Issues: Whether documents seized under the Foreign Exchange Regulation Act, 1973 could be retained beyond one year without commencement of adjudication proceedings.

Analysis: Section 41 imposed a maximum period of one year for retaining seized documents unless adjudication proceedings were commenced under Section 51 before expiry of that period. The statutory command was treated as mandatory, and continued retention after the prescribed period was disapproved. The authority was required to return the documents if no adjudication proceedings had been initiated within time. The Court also indicated that any enlargement of the retention period was a matter for legislative amendment and not administrative discretion.

Conclusion: The retention of the documents beyond one year without commencement of adjudication proceedings under Section 51 was not justified.

Final Conclusion: The challenge was not entertained, but the legal position was clarified against prolonged retention of seized documents in the absence of timely adjudication.

Ratio Decidendi: Where a statute prescribes a fixed maximum period for retention of seized documents unless adjudication proceedings are commenced within that period, the provision must be strictly complied with and the documents must be returned on expiry of time if no such proceedings have begun.

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