TaxTMI 
TaxTMI 
1994 (8) TMI 142
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....igation into two foreign currency accounts alleged to have been held by the petitioner with UCO Bank, Singapore and the Development Bank, Singapore, and the investigation is not yet completed. It is further alleged that as the seizure was under Section 38 of the Act, the respondent is entitled to retain the seized passports with them without any time limit. 2. Mr. B. Kumar, learned counsel appearing on behalf of the petitioner contended that the petitioner is in no way connected with any alleged offences under the Act and in any event, as per Section 41 of the Act, the documents seized ought to be returned within a period of one year before the amending Act of 1993 which came into effect from 8-1-1993 and after the amendment, within six months. In support of the said contention, learned counsel referred to a ruling of this court in K.M. Amir Abdul Kader v. Dy. Director, Enforcement Directorate (AIR 1986 Mad. 140) wherein Ratnam, J. (as the learned Chief Justice then was) has observed as follows : "No doubt, under Section 41 of the Act, there is no clear indication regarding the return of the document seized. Despite that, in my view, that section cannot be read as justifying....
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....quential custody of the passport will continue with the competent authority seizing the document, becomes at once a germane question. It cannot be that seizure and consequential custody can be of indefinite duration. Section 38 indicates that the concerned document or the thing seized under Section 38 should be relevant to the investigation or proceedings under the Act or in connection therewith any infraction of the Act or rules or order should have been committed. It stands to reason that the custody of the seized document or thing as a relevant or useful document or thing at least would be coterminous with the concerned investigation or proceedings during the pendency of which such seizure is effected on the ground that the seized article is useful or relevant pending such investigation or proceedings. In the present case, the seizure of the passport is being upheld under Section 38 read with Sections 51, 50 and 29(1) of the Act. The competent authority has seized the passport on the ground that it is relevant for the adjudication proceedings pending before it in connection with the alleged infraction of Section 29 (1) of the Act by the petitioner, therefore, the said seizure ca....
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....ents can be exercised for any indefinite period which may go even beyond what is contemplated for more drastic types of documents dealt with by Section 41. As we have already seen above, Section 38 contemplates the period during which custody of the seized article as relevant or useful for investigation or inquiry can be retained by the authority seizing the document. But implicit in the Section is the indication of legislative intention that custody of such documents would remain so long as the document would remain relevant or useful to the investigation or proceedings, meaning thereby, that the custody would become coterminous with the conclusion of the concerned investigation or proceedings. However, the petitioner vehemently submitted that the adjudicating authority may take months and years for finishing such proceedings and in the meantime, if the passport is permitted to be kept in the custody of the seizing authority, irreparable injury will be caused to the petitioner and he may not be able to go out of the country for indefinite period and if that happens, exercise of power under Section 38 would become unreasonable. So far as the aforesaid contention of the petitioner i....
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....78. The period for which the passport is impounded cannot, in the circumstances be said to be definite and certain and it may extend to an indefinite point of time. This would clearly make the impugned order unreasonable and the learned Attorney General appearing on behalf of the Central Government, therefore, made a statement that in case the decision to impound the passport of the petitioner is confirmed by the Central Government after hearing the petitioner, "the duration of the impounding will not exceed a period of six months from the date of the decision that may be taken on the petitioner's representation." It must be said in fairness to the Central Government that this was a very reasonable stand to adopt, because in a democratic society governed by the rule of law, it is expected of the Government that it should act not only constitutionally and legally but also fairly and justly towards the citizen. We hope and trust that in future also whenever the passport of any person is impounded under Section 10(3) (c), the impounding would be for a specified period of time which is not unreasonably long, even though no contravention of any fundamental right may be involved." It is....
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....r lend to or exchange with, any person not being an authorised dealer, any foreign exchange : Provided that nothing in this sub-section shall apply to any purchase or sale of foreign currency effected in India between any person and a money-changer. Explanation : For the purposes of this sub-section, a person, who deposits foreign exchange with another person or opens an account in foreign exchange with another person, shall be deemed to lend foreign exchange to such other person. (2) Except with the pervious general or special permission of the Reserve Bank, no person, whether an authorised dealer or a money-changer or otherwise, shall enter into any transaction which provides for the conversion of Indian currency into foreign currency or foreign currency into Indian currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank. (3) Where any foreign exchange is acquired by any person, other than an authorised dealer or a money-changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for tha....