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It is submitted that the accused has deliberately avoided his appearance before the Investigating Officer and on account of his non co- operative attitude the investigation has come to a standstill. 4. It is respectfully submitted that the accused has been intentionally avoiding his appearance before the Enforcement Directorate knowing fully well that non compliance of the directions made under Section 40 of the Act renders the person liable for prosecution in a Court of law under Section 56 of the Act which is a non-bailable offence. It is further submitted that by virtue of Section 40(3) of the Act, the accused was bound to appear before the Officers of the Enforcement Directorate in the best interest of investigation. Section 40(3) is reproduced below for kind perusal and ready reference to this Hon’ble Court : “Section 40(3) : (3) All persons so summoned shall be bound to attend either in person or by authorised agents, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required.” It is respectfully submitted that non compliance of any rule, directions or law is punishable under Section 56 of the Act. The accused willfully failed to appear before the Enforcement Directorate at the given venue, time and dates mentioned in the respective summons and has thus, contravened the provisions of Section 56 of the Act.” 12. As regards summons dated 8th November, 1999, learned senior counsel for the appellant has referred to the explanation offered by the appellant. Letter dated 22nd November, 1999 is as follows : “As you will appreciate, I am the Chairman of several public Companies both in India as well as in the USA and, therefore, my schedule is finalized several months in advance. During the fiscal year end period, the problem only gets compounded. I would, therefore, request you to excuse me from the personal appearance on November 26, 1999 as I will be out of India. I am willing to fix a mutually convenient date to appear before you.” 13. From the tenor of the letter, it appears that it was not a case of mere seeking accommodation by the appellant but requiring date to be fixed by his convenience. Such stand by a person facing allegation of serious nature could hardly be appreciated. Obviously, the enormous money power makes him believe that the State should adjust its affairs to suit his commercial convenience. 14. In our opinion, the appeal is required to be dismissed for more than one reason. The fact that the adjudicating officer chose to drop the proceedings against the appellant herein does not absolve the appellant of the criminal liability incurred by him by virtue of the operation of Section 40 read with Section 56 of the Act. The offence under Section 56 read with Section 40 of the Act is an independent offence. If the factual allegations contained in the charge are to be proved eventually at the trial of the criminal case, the appellant is still liable for the punishment notwithstanding the fact that the presence of the appellant was required by the adjudicating officer in connection with an enquiry into certain alleged violations of the various provisions of the Act, but at a subsequent stage the adjudicating officer opined that there was either insufficient or no material to proceed against the appellant for the alleged violations of the Act, is immaterial. The observations made by this Court in Roshanlal Agarwal (supra), in our opinion, must be confined to the facts of that case because this Court recorded such a conclusion “having regard to the material existing against the respondent and the reasons and findings given in the aforesaid orders…..”. The said case cannot be read as laying down a general statement of law that the prosecution of the accused, who is alleged to be guilty of an offence of not responding to the summons issued by a lawful authority for the purpose of either an inquiry or investigation into another substantive offence, would not be justified. Exonerating such an accused, who successfully evades the process of law and thereby commits an independent offence on the ground that he is found to be not guilty of the substantive offence would be destructive of law and order, apart from being against public interest. Such an exposition of law would only encourage unscrupulous elements in the society to defy the authority conferred upon the public servants to enforce the law with impunity. It is also possible, in certain cases that the time gained by such evasive tactics adopted by a person summoned itself would result in the destruction of the material which might otherwise constitute valuable evidence for establishing the commission of a substantive offence by such a recalcitrant accused. 15. Secondly, an appeal against the conclusion of the adjudicating officer that the proceedings against the appellant herein for the alleged violation of the various provisions of the FERA Act are required to be dropped has not even attained finality. Admittedly, such an order of the adjudicating officer confirmed by the statutory appellate authority is pending consideration in an appeal before the High Court. Though, in our opinion, the result of such an appeal is immaterial for determining the culpability of the appellant for the alleged violation of Section 40 read with Section 56, we must record that the submission made on behalf of the appellant in this regard itself is inherently untenable. 16. For all the abovementioned reasons, we do not see any merit in the appeal. We are also of the opinion that the entire approach adopted by the appellant is a sheer abuse of the process of law. Any other view of the matter would only go to once again establishing the notorious truth stated by Anatole France that – “the law in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets and to steal bread”. 17. The appeal is dismissed with exemplary costs quantified at rupees ten lakhs to be paid to the Supreme Court Legal Service Authority.

REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.1406 OF 2009


VIJAY MALLYA                                           …APPELLANT

VERSUS

ENFORCEMENT DIRECTORATE,
MIN. OF FINANCE                           ...RESPONDENT


                               J U D G M E N T





ADARSH KUMAR GOEL, J.

1.    This appeal has been preferred against judgment and  order       dated
21st May, 2007 of the High Court of Delhi at New Delhi in Criminal  Revision
Petition No.554 of 2001.

2.    Brief facts necessary  for  decision  of  this  appeal  are  that  the
appellant  was  summoned  by  the  Chief  Enforcement  Officer,  Enforcement
Directorate, under Section 40 of the Foreign Exchange Regulation  Act,  1973
(“the Act”) with his passport and correspondence relating to  a  transaction
with Flavio Briatore of  M/s. Benetton Formula Ltd., London,  to  which  the
appellant, as Chairman of United Breweries Ltd.,  was  a  party.  Allegation
against the appellant was that he  entered  into  an  agreement   dated  1st
December, 1995 with the earlier mentioned English Company for  advertisement
of  ‘Kingfisher’  brand  name  on  racing  cars   during   Formula-I   World
Championships for the years 1996, 1997 and 1998 providing for  fee  payable.
Requisite permission of the Reserve Bank of India was not  taken  which  was
in violation of provisions of Sections 47(1) & (2), 9(1)(c) and 8(1) of  the
Act.  Approval was later sought from Finance Ministry for  payment        on
19th June, 1996, which was  rejected  on  4th  February,  1999.   Since  the
appellant failed to appear in response to summons issued more than  once,  a
complaint dated 8th March, 2000 under  Section  56  of  the  Act  was  filed
before the Additional Chief Metropolitan Magistrate, New  Delhi.  The  trial
court after considering the material on record summoned  the  appellant  and
framed charge against him under Section 56 of the Act.

3.      The   appellant   challenged   the   order   of    the    Magistrate
dated 9th August, 2001 in above Criminal Complaint No.16/1          of  2000
and also sought quashing of proceedings in the  said  complaint  before  the
High Court by filing Criminal  Revision  Petition  No.554  of  2001  on  the
ground that willful default of the appellant could not  have  been  inferred
and that there was non-application of mind in the  issuance  of  summons  as
well as in framing the charge which was in violation of procedure laid  down
under Section 219 of the Criminal Procedure Code.   The  charge  related  to
failure of the appellant to  appear  on  four  occasions,        i.e.,  27th
September, 1999, 8th November,1999, 26th November,  1999  and  3rd  January,
2000.  In respect of first date, it  was  submitted  that  the  trial  court
itself accepted  that  the  service  of  summons  was  after  the  time  for
appearance indicated in the summons.  In respect of second and third  dates,
the appellant had responded and informed about his inability to  appear  and
for the last date, summons was not as per  procedure,  i.e.,  by  registered
post.  It was submitted
that composite charge was against Section  219  of  the  Criminal  Procedure
Code.

4.    The High Court rejected the contentions by  holding  that  framing  of
composite charge could not be treated to have  caused  prejudice  so  as  to
vitiate the proceedings.  It  was  further  observed  that  default  of  the
appellant in relation to summons                      dated 15th  September,
1999 for attendance on 27th September, 1999 could not be taken into  account
and to that extent the charge was liable to be deleted but  with  regard  to
the defaults in relation to summons dated 7th October, 1989,  8th  November,
2009                   and 21st December, 1999,  the  proceedings  were  not
liable to be interfered with as  the  appellant  could  contest  the  matter
before the trial court itself in the first instance.

5.    We have heard Shri  F.S.  Nariman,  learned  senior  counsel  for  the
appellant and Shri K. Radhakrishnan, learned senior counsel for
the respondent.

6.    When the matter came up for  hearing  before  this  Court  earlier,  a
statement was made on behalf of the appellant that the  appellant  expressed
regret for not responding to the summons on  which  learned  senior  counsel
for the respondent took time to ascertain whether  the  complaint  could  be
withdrawn.  Thereafter, it was stated that withdrawal of the  complaint  may
have impact on  other  matters  and  for  that  reason  withdrawal  was  not
possible.  However, the question whether the non compliance  was  deliberate
was required to be examined.   Learned  senior  counsel  for  the  appellant
submitted that the default was not deliberate, intentional or willful  which
may be punishable under Section 56 of the Act and  the  appellant  had  sent
reply and sought a fresh date on two occasions.

7.    It was further submitted that subsequent events which  were  not  gone
into by the High Court may also be seen.  The complaint  was  filed  on  8th
March, 2000.  During pendency of the complaint, the Act (FERA) was  repealed
on 1st June, 2000.  Still, show cause notice  dated  13th  March,  2001  was
issued to which reply was given and  the  adjudicating  officer  vide  order
dated 10th January, 2002 dropped the proceedings on merits.   The  Appellate
Board dismissed the Revision  Petition  filed  by  the  Department  on  16th
March, 2004.  Against the said order, Criminal Appeal  No.515  of  2004  was
pending in the High Court.

8.    It was  submitted  that  having  regard  to  repeal  of  the  Act  and
exoneration of the appellant by the departmental  authorities  (even  though
an appeal was pending in the High Court), this Court  in  the  circumstances
of the case ought to quash proceedings,  following  law  laid  down  in  Dy.
Chief Controller of Import and Export vs. Roshan Lal Agarwal[1]  as  follows
:

“13. In view of the findings recorded by us, the learned Magistrate  has  to
proceed with  the  trial  of  the  accused-respondents.  Shri  Ashok  Desai,
learned Senior Counsel has, however, submitted that the Imports and  Exports
(Control) Act,  1947  has  since  been  repealed  and  in  the  departmental
proceedings taken under  the  aforesaid  Act,  the  Central  Government  has
passed orders in favour of  the  respondents  and,  therefore,  their  trial
before the criminal court at this stage would be an  exercise  in  futility.
He has placed before us copies  of  the  orders  passed  by  the  Additional
Director General  of  [pic]Foreign  Trade  on  16-8-1993  and  also  by  the
Appellate Committee Cell, Ministry of Commerce, Government of India on 13-3-
1997 by which the appeals preferred by the respondents were allowed  by  the
Appellate Committee and  the  accused-respondents  were  exonerated.  Having
regard to the material existing against the respondents and the reasons  and
findings given in the aforesaid orders,  we  are  of  the  opinion  that  no
useful purpose would be served by the trial of  the  accused-respondents  in
the criminal court at this stage. The  proceedings  of  the  criminal  cases
instituted against the accused-respondents on the basis  of  the  complaints
filed by the Deputy Chief Controller of Imports and Exports are,  therefore,
quashed”.

Alternatively, explanation of  the  appellant  for  non  appearance  may  be
looked into on merits instead of the same being left to the trial court.

9.    Before we consider the submissions made, the provisions of Section  40
and 56 of the Act  may be noticed which are as follows :

“Section 40  -  Power  to  summon  persons  to  give  evidence  and  produce
documents

 (1) Any Gazetted Officer of Enforcement shall  have  power  to  summon  any
person whose attendance he considers necessary either to  give  evidence  or
to produce a document during the course of any investigation  or  proceeding
under this Act.

(2) A summon to produce documents may  be  for  the  production  of  certain
specified documents or for the production of  all  documents  of  a  certain
description in the possession or under the control of the person summoned.

(3) All persons so summoned shall be bound to attend either in person or  by
authorised agents, as such officer may direct; and all persons  so  summoned
shall be bound to state the truth upon any  subject  respecting  which  they
are examined or make  statements  and  produce  such  documents  as  may  be
required:

Provided  that  the  exemption  under  section 132 of  the  Code  of   Civil
Procedure, 1908 (5 of 1908) shall  be  applicable  to  any  requisition  for
attendance under this section.

(4) Every such investigation or proceeding as aforesaid shall be  deemed  to
be a judicial proceeding within the meaning of  sections 193 and 228 of  the
Indian Penal Code, 1860 (45of 1860).

Section 56 - Offences and prosecutions

 (1)Without prejudice to any award of penalty by  the  adjudicating  officer
under this Act, if any person contravenes any of the provisions of this  Act
[other than Section  13,  Clause  (a)  of  sub-section(1)  of  (Section  18,
Section 18A), clause (a) of sub-section (1) of  Section  19,  sub-section(2)
of Section 44 and Section 57 and 58] or of  any  rule,  direction  or  order
made thereunder, he shall, upon conviction by a court, be punishable

(i) in the case of an offence the amount or value involved in which  exceeds
one lakh of rupees with imprisonment for a term  which  shall  not  be  less
than six months, but  which  may  extend  to  seven  years  and  with  fine;
Provided that the Court may, for any adequate  and  special  reasons  to  be
mentioned in the judgment, impose a sentence of imprisonment for a  term  of
less than six months;

(ii)in any other case, with imprisonment for a  term  which  may  extend  to
three years or with fine or with both.”



10.   In Enforcement Directorate vs. M. Samba Siva Rao[2], it  was  observed
:

“3. xxxxxxxx

The Foreign  Exchange  Regulation  Act,  1973  was  enacted  by  Parliament,
basically for the conservation of the  foreign  exchange  resources  of  the
country and the proper utilisation  thereof  in  the  interest  of  economic
development of the country. The Act having been enacted in the  interest  of
national economy, the provisions thereof should be construed so as  to  make
it workable and  the  interpretation  given  should  be  purposive  and  the
provisions should receive a fair construction without doing any violence  to
the language employed by the  legislature.  The  provisions  of  Section  40
itself, which confers power on the officer of the  Enforcement  Directorate,
to summon any person whose attendance  he  considers  necessary  during  the
course of any investigation, makes it binding as provided under  sub-section
(3) of Section 40, and the investigation or the proceeding in the course  of
which such summons are issued have been deemed to be a  judicial  proceeding
by virtue of sub-section (4) of  Section  40.  These  principles  should  be
borne in mind, while interpreting the  provisions  of  Section  40  and  its
effect, if a  person  violates  or  disobeys  the  directions  issued  under
Section 40.”

11.   The above observations clearly show that a complaint  is  maintainable
if there is default in  not  carrying  out  summons  lawfully  issued.   The
averments in the complaint show that the summons      dated  21st  December,
1999 were refused by the appellant and earlier summons were not carried  out
deliberately. The averments in       paras 3 and 4 of the complaint  are  as
follows :

“3.   That the complainant issued a summons dated 21.12.1999  under  Section
40 of FERA, 1973 in connection with the  impending  investigations  for  the
appearance of the accused on 3.1.2000 but the same have been  returned  back
by the postal authorities with the remarks “refused”.

      It  is  submitted  that  the  accused  has  deliberately  avoided  his
appearance before the Investigating Officer and on account of  his  non  co-
operative attitude the investigation has come to a standstill.

4.    It is respectfully submitted that the accused has  been  intentionally
avoiding his appearance before the  Enforcement  Directorate  knowing  fully
well that non compliance of the directions made under Section 40 of the  Act
renders the person liable for prosecution in a Court of  law  under  Section
56 of the Act which is a non-bailable  offence.   It  is  further  submitted
that by virtue of Section 40(3) of the Act, the accused was bound to  appear
before the Officers of the Enforcement Directorate in the best  interest  of
investigation.  Section 40(3) is  reproduced  below  for  kind  perusal  and
ready reference to this Hon’ble Court :

            “Section 40(3) :

(3)   All persons so summoned shall be bound to attend either in  person  or
by authorised agents, as  such  officer  may  direct;  and  all  persons  so
summoned shall be bound to state  the  truth  upon  any  subject  respecting
which they are examined or make statements and  produce  such  documents  as
may be required.”

      It  is  respectfully  submitted  that  non  compliance  of  any  rule,
directions or law is punishable under Section 56 of the  Act.   The  accused
willfully failed to appear before the Enforcement Directorate at  the  given
venue, time and dates mentioned in the  respective  summons  and  has  thus,
contravened the provisions of Section 56 of the Act.”

12.   As regards summons dated 8th November, 1999,  learned  senior  counsel
for the appellant has referred to the explanation offered by the  appellant.
 Letter dated 22nd November, 1999 is as follows :

“As you will appreciate, I am the Chairman of several public Companies  both
in India as well as in the USA and,  therefore,  my  schedule  is  finalized
several months in advance.  During the fiscal year end period,  the  problem
only gets compounded.

I would, therefore, request you to excuse me from  the  personal  appearance
on November 26, 1999 as I will be out of India.

I am willing to fix a mutually convenient date to appear before you.”

13.   From the tenor of the letter, it appears that it was  not  a  case  of
mere seeking accommodation by the appellant but requiring date to  be  fixed
by his convenience.  Such stand by a person  facing  allegation  of  serious
nature could hardly be appreciated.  Obviously,  the  enormous  money  power
makes him believe that the State should  adjust  its  affairs  to  suit  his
commercial convenience.

14.   In our opinion, the appeal is required to be dismissed for  more  than
one reason.  The fact that  the  adjudicating  officer  chose  to  drop  the
proceedings against the appellant herein does not absolve the  appellant  of
the criminal liability incurred  by  him  by  virtue  of  the  operation  of
Section 40 read with Section 56 of the Act.  The offence  under  Section  56
read with Section 40 of the Act is an independent offence.  If  the  factual
allegations contained in the charge are  to  be  proved  eventually  at  the
trial  of  the  criminal  case,  the  appellant  is  still  liable  for  the
punishment notwithstanding the fact that the presence of the  appellant  was
required by the adjudicating officer in  connection  with  an  enquiry  into
certain alleged violations of the various provisions of the Act,  but  at  a
subsequent stage the adjudicating  officer  opined  that  there  was  either
insufficient or no  material  to  proceed  against  the  appellant  for  the
alleged violations of the Act, is  immaterial.   The  observations  made  by
this Court in Roshanlal Agarwal (supra), in our opinion,  must  be  confined
to the facts of that case because this  Court  recorded  such  a  conclusion
“having regard to the material  existing  against  the  respondent  and  the
reasons and findings given in  the  aforesaid  orders…..”.   The  said  case
cannot be  read  as  laying  down  a  general  statement  of  law  that  the
prosecution of the accused, who is alleged to be guilty  of  an  offence  of
not responding to the summons issued by a lawful authority for  the  purpose
of either an inquiry or  investigation  into  another  substantive  offence,
would not be justified.   Exonerating  such  an  accused,  who  successfully
evades the process of law and thereby commits an independent offence on  the
ground that he is found to be not guilty of the  substantive  offence  would
be destructive of law and order, apart from being against  public  interest.
Such an exposition of law would only encourage unscrupulous elements in  the
society to defy the authority conferred upon the public servants to  enforce
the law with impunity.  It is also possible, in certain cases that the  time
gained by such evasive tactics adopted by a  person  summoned  itself  would
result in the destruction of the material which might  otherwise  constitute
valuable evidence for establishing the commission of a  substantive  offence
by such a recalcitrant accused.

15.   Secondly,  an  appeal  against  the  conclusion  of  the  adjudicating
officer that the proceedings against the appellant herein  for  the  alleged
violation of the various provisions of the  FERA  Act  are  required  to  be
dropped has not even attained finality.  Admittedly, such an  order  of  the
adjudicating officer confirmed  by  the  statutory  appellate  authority  is
pending consideration in an appeal before the High Court.   Though,  in  our
opinion, the result of such an appeal  is  immaterial  for  determining  the
culpability of the appellant for the alleged violation of  Section  40  read
with Section 56, we must record that the submission made on  behalf  of  the
appellant in this regard itself is inherently untenable.

16.   For all the abovementioned reasons, we do not see  any  merit  in  the
appeal.  We are also of the opinion that the entire approach adopted by  the
appellant is a sheer abuse of the process of law.  Any  other  view  of  the
matter would only go to once again establishing the notorious  truth  stated
by Anatole France that – “the law in  its  majestic  equality,  forbids  the
rich as well as the poor to sleep under bridges, to beg in the  streets  and
to steal bread”.

17.   The appeal is dismissed with exemplary costs quantified at rupees  ten
lakhs to be paid to the Supreme Court Legal Service Authority.


                                                          ……..…………………………….J.
                                                          [ J. CHELAMESWAR ]



                                                         .….………………………………..J.
                                                       [ ADARSH KUMAR GOEL ]
NEW DELHI
JULY 13, 2015

ITEM NO.1A-For Judgment    COURT NO.4         SECTION II

                  S U P R E M E  C O U R T  O F  I N D I A
                        RECORD OF PROCEEDINGS

Criminal Appeal  No(s).  1406/2009

VIJAY MALLYA                               Appellant(s)


                   VERSUS


ENFORCEMENT DIRECTORATE,
MIN.OF FINANCE.                                Respondent(s)


Date : 13/07/2015 This appeal was called on for  pronouncement  of  JUDGMENT
today.

For Appellant(s)
                M/s. Khaitan & Co.

For Respondent(s)       Mr. Surender Kumar Gupta, Adv.
                        Mr. B.K. Prasad, Adv.
                Mr. B. V. Balaram Das,Adv.

      Hon'ble Mr. Justice Adarsh Kumar Goel pronounced the judgment  of  the
Bench comprising Hon'ble Mr. Justice J. Chelameswar and His Lordship.
            The appeal is  dismissed  in  terms  of  the  signed  Reportable
judgment with exemplary costs quantified at rupees ten lakhs to be  paid  to
the Supreme Court Legal Service Authority.

(VINOD KR.JHA)                   (RENUKA SADANA)
      COURT MASTER                      COURT MASTER

(Signed Reportable judgment is placed on the file)

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[1]    (2003) 4 SCC 139
[2]    (2000) 5 SCC 431

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