2023 (4) TMI 875 - HC - FEMA

Court overturns Magistrate's ruling for FERA non-compliance & misdirection. Emphasizes need for proper authorization in complaints.

The Court set aside the Metropolitan Magistrate's judgment due to non-compliance with FERA provisions and misdirection in considering the complainant's ... Offence u/s 57 of the FERA - Non Complaint filed in compliance of the provisions of section 61 (2)(ii) of the FERA - HELD THAT:- As in this case where an offence under Section 57 of the Foreign Exchange Regulation Act, 1973 has been alleged against the accused person, the law provides that either the Enforcement Director or an officer authorised in writing on behalf of the Director or the Central Government or an authorised officer of Reserve Bank, shall be eligible to institute a complaint. The Magistrate has also emphasized that the appellant would not have the locus standi to initiate prosecution in absence of any authorization, without however considering or taking judicial note of his evidence and Exhibit-A (i.e., authorization certificate dated (22.12.2005). The Magistrate could not ignore the ocular and documentary evidence before it, more so, when all these were uncontroverted. By virtue of holding officer at the particular period of time and having been authorized vide ‘Exhibit-A’ there was no impediment for the appellant to institute prosecution, which the Magistrate has not considered and such non-application of mind has rendered his findings not tenable in the eyes of law. The Magistrate was duty bound to take note of the same, more particularly, in terms of Section 57(7) of the Evidence Act. It was a mandate of law. The notification dated 24th September, 1993 read with the direct evidence of the appellant before the Trial Court would unfailingly point out to the fact of the appellant to be competent officer under law, to institute prosecution on behalf of the Enforcement Directorate. By not considering all these factual and legal aspects, the Trial Court has committed gross error. The impugned judgment suffers from non-application of mind and illegality. Thus unable to place occurrence with the finding of the Court in the impugned judgment that provisions of Section 61 (2) (ii) of the Foreign Exchange Regulation Act, 1973 has not been complied with by the complainant in order to institute a case punishable under Section 57, as it is in this particular proceeding. In my considered opinion, the impugned judgment of the Trial Court suffers for non-application of mind and wrong appreciation of the fact situation as well as the settled provisions of law. Accordingly, the same would not be maintainable and liable to be set aside, being not inconfirmity with the laws. The impugned judgment is set aside - Appeal allowed. Issues:Challenge to judgment of Metropolitan Magistrate regarding non-compliance with FERA provisions and locus standi of complainant.Analysis:The appellant, an Officer of Directorate of Enforcement, challenged a judgment of Metropolitan Magistrate, Calcutta, regarding non-compliance with FERA provisions and locus standi of the complainant. The Trial Court considered two points: failure to pay penalty within stipulated period and compliance with FERA provisions. The Trial Court found non-compliance with Section 61 (2) (ii) of FERA, leading to a bad law application in taking cognizance of the offence under Section 57. The appellant, aggrieved by this, argued misdirection by the Trial Court in considering relevant documents and laws. The appellant contended that the complainant had the locus standi and was entitled to proceed with the case. The Court noted that the Trial Court failed to consider important documents, including a public notification. The appellant relied on a Rajasthan High Court judgment to emphasize the importance of the concerned officer's evidence. The Court highlighted the necessity of written authorization for filing a complaint under FERA.The Court examined an authorization certificate and a government notification authorizing officers to file complaints under FERA. It emphasized the significance of the authorization letter and the publication in the Official Gazette. The Court criticized the Trial Court's failure to consider these crucial documents and the legal provisions. It found the Trial Court's judgment erroneous and lacking proper application of the law. The Court reiterated the specific officers eligible to maintain criminal proceedings under FERA and stressed the importance of adherence to these provisions. It emphasized the need for the Trial Court to consider all factual and legal aspects before making a decision.The Court set aside the impugned judgment, directing the appointment of a duly authorized person to represent the appellant in the Trial Court. It instructed the Trial Court to proceed expeditiously, considering the time elapsed during the appeal. The appeal was allowed, and all pending applications were disposed of. Certified copies of the order were to be provided to the parties upon application. The judgment highlighted the importance of proper authorization and compliance with legal provisions in initiating criminal proceedings under FERA, emphasizing the need for meticulous consideration of evidence and documents in such cases.