Binding summons under foreign exchange law can attract penal liability for non-compliance under the Act.

Refusal to comply with a binding summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 constitutes contravention of the Act and is punishable under Section 56. The Court treated the summons as a statutory direction within a self-contained enforcement scheme, and held that disobedience is not excluded from penal liability merely because no monetary value is involved. On that basis, complaints alleging non-compliance with the summons were held maintainable and could proceed in accordance with law.

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Issues: Whether refusal to comply with a summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 attracted penal liability under Section 56 of that Act.

Analysis: Section 40 confers power on Enforcement officers to summon persons for evidence or production of documents, and sub-section (3) makes attendance and compliance obligatory. The scheme of the Act treats the investigation as a judicial proceeding, and the Act is a self-contained code intended to be construed purposively so as to make its enforcement effective. On a plain reading of Section 56, contravention of any provision of the Act or of any rule, direction or order made thereunder is punishable. A summons issued under Section 40 is a binding statutory direction, and disobedience of it is not outside the reach of Section 56 merely because no money value is directly involved.

Conclusion: Refusal to obey a summons under Section 40 is punishable under Section 56, and the complaints could not be quashed on the ground that Section 56 was inapplicable.

Final Conclusion: The appeals succeeded, the High Court's view was set aside, and the complaint proceedings were allowed to continue in accordance with law.

Ratio Decidendi: Disobedience of a binding summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 constitutes contravention of the Act or of a direction made thereunder and is punishable under Section 56.

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