Court Or Adjudicating Authority Is Empowered To Confiscate Any Currency Of Which Contravention Taken Place: Delhi High Court
The Delhi High Court said that the property with respect to which contravention has taken place includes Indian currency, where the said property is converted into that currency.
Delhi High Court
The Delhi High Court clarified that the Court or Adjudicating Authority is empowered to confiscate any currency, security or other money or property in respect of which the contravention has taken place.
The Court was deciding a Criminal Appeal filed under Section 35 of the Foreign Exchange Management Act, 1999 (FEMA), challenging the Order of the Deputy Director, Directorate of Enforcement (ED) and the Order of the Appellate Tribunal for Foreign Exchange.
A Division Bench comprising Justice Subramonium Prasad and Justice Vimal Kumar Yadav emphasised, “A perusal of Section 63 of FERA makes it manifestly clear that the Court or Adjudicating Authority is empowered to confiscate “any currency, security or other money or property in respect of which the contravention has taken place.” Contravention of Section 56 of FEMA operates as the trigger that activates and justifies the exercise of power under Section 63 and the only qualifying, in-built threshold for exercise of the power of confiscation by the Court or the Adjudicating Officer is the application of mind, which is indicative from the use of the words "if it or he thinks fit".
The Bench added that the language of Section 56 is wide enough to include Indian currency and unambiguous, clear, and precise in its object and nowhere does the Section disqualify or prohibit either the Court or Adjudicating Authority from confiscating Indian Currency.
Advocate Jaspreet Singh Kapur represented the Appellant, while SPC Bharathi Raju represented the Respondents.
Facts of the Case
In 1997, after receipt of specific information that an illegal foreign exchange business was being conducted by the Appellant, the ED (Respondent Agency) conducted a search of the residential premises of a person and the business premises of the Appellant. Consequently, Indian currency worth Rs. 12,31,000/-, USD 6,371/-, four gold biscuits, two pieces of gold along with certain documents were recovered from the business premises of the Appellant. During the search operation, two Nepalese Nationals entered the premises and they were also subject to search. Upon search, USD along with Nepali Currency and certain documents were recovered.
As per the prosecution case, the Appellant admitted that he was purchasing gold brought from Nepal against payments made in foreign exchange. He further admitted that he was engaged in illegal purchase and sale of foreign exchange in contravention of Sections 8(1), 8(2), 63, and 64(2) of FERA (Foreign Exchange Regulation Act, 1973). The Adjudicating Officer held the Appellant liable and imposed a penalty of Rs. 40,000/- on him. It also confiscated the Indian currency of Rs. 12,31,000/- lying with the Appellant. The Appellant filed an Appeal and the Appellate Tribunal dismissed the same. Being aggrieved, the Appellant approached the High Court.
Reasoning
The High Court in view of the facts and circumstances of the case, observed, “In the opinion of this Court once basic facts have been established and recorded, the Adjudicating Authority is entitled to draw an inference based on those facts. The Appellant has been unable to demonstrate that the inference drawn by the Adjudicating Authority or the Appellate Tribunal is perverse or unsubstantiated, in absence thereof, it cannot be said that the conclusion arrived at by the Adjudicating Authority and the Appellate Tribunal warrants any interference.”
The Court enunciated that even if a statement is retracted it can be relied upon as long as it is voluntary and corroborated and additionally, if a statement has been redacted by the maker on the grounds that the statement was obtained by illegal means it is only for the maker of the statement who alleges inducement, threat, promise etc. to establish that such improper means were adopted.
“It is well settled that the meaning of an enactment which was intended by the legislator i.e. the legal meaning is to be understood as corresponds to its literal meaning. Quoties in verbis nulla est ambiguitas, ibi nulla expositio contra verba expressa fienda est (when there is no ambiguity in the words, then no exposition contrary to the expressed words is to be made) [See Bennion on Statutory Interpretation, VIth Edition, pp. 780]”, it reiterated.
The Court said that the property with respect to which contravention has taken place includes Indian currency, where the said property is converted into that currency.
“Thus, as far as the second contention of the Appellant is concerned this Court cannot evade the legislative intent or give an absurd construction of the enactment to the Section, especially where no interpretation is required. Accordingly, the contention of the learned Counsel for the Appellant that the Respondent Agency did not have any legal basis to confiscate Indian currency, cannot be accepted”, it noted.
Conclusion
The Court was of the view that once the Respondent Agency has established the factum of recovery of illegal foreign exchange from the Appellant’s premises, the onus shifts to the Appellant to demonstrate that the Indian currency recovered from his premises was not intended for illegal purchase of purchase of foreign exchange.
“After perusing the material on record, orders of the Adjudicating Authority and the Appellate Tribunal as well as having considered the arguments advanced by the parties, this Court is of the view that the Appellant has not been able to offer any satisfactory explanation to explain the source of Indian currency. In the absence of any such explanation, and in view of the recoveries made from the business premises of the Appellant and the evidence on record, this Court is of the view that the inference of the Adjudicating Authority, that the Indian currency was intended for contravention, stands confirmed”, it concluded.
Accordingly, the High Court dismissed the Appeal and upheld the impugned Order.
Cause Title- Arjun Patil v. UOI & Ors. (Neutral Citation: 2025:DHC:9267-DB)
Appearance:
Appellant: Advocates Jaspreet Singh Kapur, Wasim Ansari, and Shweta.
Respondents: SPC Bharathi Raju, Advocates Divyangi, Vivek Gurnani (Panel Counsel), and Kanishk Maurya.
