Passport suspension cannot rest on FEMA non-appearance alone where the statutory scheme does not support custodial action.

Non-appearance in an investigation under FEMA, by itself, does not justify suspension or impounding of a passport under Section 10(3)(c) of the Passports Act in the interest of public interest. Where the statutory scheme under FEMA contemplates adjudication rather than arrest or custodial interrogation, and the person has supplied documents and offered teleconferencing, the passport restriction lacks legal foundation. Applying the earlier binding precedent, the passport suspension was held unsustainable and quashed, while leaving the authorities free to pursue other proceedings permissible in law.

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Issues: Whether the suspension of the petitioner's passport under Section 10(3)(c) of the Passports Act, 1967, on the ground of non-appearance in an investigation under the Foreign Exchange Management Act, 1999, was sustainable in law.

Analysis: The impugned action was founded only on the petitioner's alleged non-cooperation in proceedings under FEMA. The legal framework of FEMA does not provide for arrest or custodial interrogation in such investigation, and the alleged breach of FEMA would ordinarily lead to adjudication under the statutory mechanism provided by the Act. The decision in the earlier binding precedent had already held that non-appearance in FEMA proceedings does not, by itself, justify impounding or revocation of a passport in the interests of general public under Section 10(3)(c) of the Passports Act, 1967. The petitioner had also furnished the documents sought and had offered to appear through teleconferencing, which was a permissible alternative mode of examination.

Conclusion: The suspension of the petitioner's passport was not legally sustainable and was liable to be set aside. The issue is answered in favour of the petitioner.

Final Conclusion: The passport suspension order was quashed, while leaving it open to the authorities to take any other proceedings permissible in law.

Ratio Decidendi: Non-appearance in an investigation under FEMA, without custodial interrogation or a statutorily permissible ground under the Passports Act, does not justify impounding a passport in public interest.

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