S.K. Sinha, Chief Enforcement Officer vs Videocon International Ltd. & Ors

3. To appreciate the controversy raised in the appeal instituted by the Chief Enforcement Officer, Enforcement Directorate, Government of India (appellant herein), few relevant facts may be noted.

4. Respondent No.1M/s. Videocon International Ltd. (Company for short) is a Public Limited Company incorporated under the Companies Act, 1956 having its business at Mumbai and Aurangabad in the State of Maharashtra. On October 13, 1989, the Company entered into an agreement with Radio Export (Moscow) for the supply of colour tubes, electrolytic capacitors, transformers, etc., for Rs.44,04,00,000/-. The payment was made by respondent No.1 Company to Japanese and Korean suppliers. But before any payment could be received by respondent No.1 from the USSR Company, there was political turmoil in the USSR and payment to foreign suppliers was disrupted. On January 5, 1993, Additional Director General, Directorate of Revenue Intelligence, Mumbai addressed a letter to the appellant alerting him about the activities of the Company in connection with the agreement to supply television sets to Radio Export, Moscow. Based on the information forwarded by the Directorate of Revenue Intelligence, Bombay, the appellant addressed two letters to the Chief Manager of Indian Bank, Nariman Point, Bombay requesting the Bank to supply details of the export outstanding of the Company. Indian Bank supplied necessary information and indicated that the export outstanding of the Company was Rs.16,60,00,000/-. The Reserve Bank of India turned down the request of the Company for reimbursement of differential amount remaining unpaid on the ground that the exports were effected from Korea and Japan and not from India and the Company was not entitled to reimbursement. In pursuance of the summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA), Raj Kumar Dhoot, Director of the Company appeared before the Department on April 25, 1999 and made a statement that there was an agreement between the Company and M/s Radio Export, Moscow for supply of two lakh television sets and other equipments for Rs.44,04,00,000/-. The amount was received by the Company through State Bank of India, Overseas Branch, Bombay. He further stated that the television sets had been procured from Korea and Japan who had been paid equivalent to Rs.19,00,00,000/- in foreign exchange. Export bills raised from the sale to M/s Radio Export, Moscow were equivalent to Rs.16,00,00,000/-. Whereas the contract with the suppliers in Korea and Japan stipulated payment in US Dollars, the contract with the USSR Company required payment in Indian Rupees. Since the value of Rupee against the US Dollar fell down, the Company had to pay more Rupees to their foreign suppliers. On June 1, 2000, FERA was replaced by the Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA).

complainant in the capacity as Chief Enforcement Officer, Government of India, filed Criminal Complaint No. 1149/S/2002 against the Company alleging that the Company had received an amount of Rs.44,04,00,000/- through State Bank of India, Bombay but it failed to take steps to realize export proceeds amounting to Rs.16,60,00,000/- within the stipulated period of six months. It thereby contravened Section 18(2) and 18(3) read with Section 68(1), punishable under Section 56(1)(ii) of FERA. On the same day, i.e. on May 24, 2002, after hearing the learned counsel for the Department, the Chief Metropolitan Magistrate, Esplanade, Mumbai took cognizance of the offence and issued summons to the accused. On February 3, 2003, the Chief Metropolitan Magistrate issued process requiring the respondents to appear before the Court and answer the charge under FERA.

7. Notice was issued by this Court on September 29, 2006. The respondents appeared. Counter affidavit and rejoinder affidavit were then filed. The Registry was directed to place the matter for final hearing on a non- miscellaneous day and that is how the matter is placed before us.

(4) When by any law for the time being in force any process-fees or other fees are payable, no process shall be issued until the fees are paid and, if such fees are not paid within a reasonable time, the Magistrate may dismiss the complaint.

29. In our opinion, it would not be necessary for us to express any opinion one way or the other on the larger question. We have already held in the earlier part of the judgment that in the case on hand, cognizance of an offence had already been taken by the Chief Metropolitan Magistrate, Mumbai on May 24, 2002, well within the period prescribed by sub-section (3) of Section 49 of FEMA within two years of coming into force of the Act from June 1, 2000. We, therefore, express no opinion on the question raised by the learned counsel for the respondent.

31. For the foregoing reasons, the appeal is allowed. The order passed by the High Court is set aside and it is held that cognizance of the offence had already been taken by the competent Criminal Court i.e. Chief Metropolitan Magistrate, Mumbai on May 24, 2002 and it could not be said that the proceedings were barred by Section 49(3) of FEMA. The Chief Metropolitan Magistrate will now proceed to consider the matter in accordance with law. All contentions of all parties are kept open except the one decided by us in this appeal. Since the matter is very old, the Court will give priority and will decide it as expeditiously as possible, preferably before June 30, 2008.

32. Ordered accordingly.