No criminal proceedings under FERA after ED clean chit: SC

Posted By: Pti
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New Delhi, Feb 20 (PTI) In a significant verdict, theSupreme Court has ruled that a person cannot be subjected tocriminal prosecution for violation of foreign exchange law ifthe adjudicating authority in the Enforcement Directorate hadalready given him a clean chit.

The ruling was passed by a majority decision of a three-judge bench with one of the dissenting judges taking acontrary view that criminal proceedings can go on irrespectiveof the clean chit by the adjudicating officer.

The bench passed the ruling upholding the appeal filed bya Kolkota-based businessman Radheshyam Kejriwal challengingthe proceedings initiated by the ED under the Foreign ExchangeRegulation Act-FERA (now replaced by FEMA).

The trial court and later the Calcutta High Court haddismissed his plea following which he moved the apex court.

The majority view was that it would be an abuse of theprocess of court if ED is allowed to pursue the criminal caseafter he has been exonerated in departmental proceedings.

"In the face of the finding by the EnforcementDirectorate in adjudication proceeding that there is nocontravention of any of the provisions of the Act, it would beunjust and an abuse of the process of the court to permit itto continue with the criminal prosecution," justices H S Bediand C K Prasad said.

The third judge of the bench, Justice P Sathasivam,however, differed and said findings of the departmentalproceedings is not binding on the court.

"Legislature intended to treat the two proceedings asindependent of each other. There is nothing in the present Actto indicate that a finding in adjudication is binding on thecourt in a prosecution," Justice Sathasivam said adding thatthe two proceedings are independent.

Kejriwal pleaded he cannot be prosecuted after theadjudication officer of the department came to the conclusionthat the allegation made against him of violating FERA rulescannot be sustained.

He said ED on the same allegation, which was the subjectmatter of adjudication proceedings, filed a complaint againstthe appellant for prosecution under the Act before theMetropolitan Magistrate.

Granting relief to Kejriwal, the apex court said, "Theappeal is allowed, the impugned judgement of the MetropolitanMagistrate and the order affirming the same by the High Courtare set aside and his prosecution is quashed." PTI AAC RB SDG

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