V.N. Sudhagaran vs Enforcement Officer

The petitioner is seeking for grant of anticipatory bail on the ground that he is being implicated under sections 8(1) and 9(1) of the Foreign

Exchange Regulation Act, 1973, hereinafter called as ''FERA'' in short.

It is stated in the petition that he is a Director in a Company M/s. Super Duper T.V. Private Limited. This Company is doing business in making

the features and short films for being telecast in the satellite channel. The features and films are done in Madras and given to satellite channel in

Madras. The petitioner has been summoned u/s 40 of the FERA in an on going investigation and as a follow-up action. It was considered

necessary by the respondent and summons were issued on 9-7-1996 for appearance on 15-7-1996, for which he sought three weeks

adjournment. The respondent has issued fresh summons on 15-7-1996 for his appearance on 18-7-1996. The petitioner again took adjournment

by his letter dated 17-7-1996. Further summons was issued for his appearance on 22-7-1996. Again, the petitioner sought adjournment. On 22-

7-1996, a fresh summons for his appearance on 30-7-1996, was issued with a covering letter stating that no adjournment would be given.

Apprehending arrest in the event of his appearance before the respondent, he has filed this application. He has stated the basis for his apprehension

at para 8 of the application contending that one other Director of J.J. T.V. Private Limited Viz., Mrs. Sasikala had also appeared before the

respondent in pursuance of the summons in connection with an enquiry relating to the affairs of the J.J. T.V. and she has been arrested and is in

judicial custody. It is also stated that his apprehension is bona fide and if he appears before the respondent, he would also be arrested and

incarcerated. He has denied any violation of the provision of the FERA and pleaded his ignorance about the affairs of J.J. T.V. Privated Limited,

but admitted that he had contributed certain sum of money for purchase of an Estate at Nilgiris. That purchase was by obtaining a loan and it is not

in violation of any of the provisions of the FERA.

It is an indisputable fact that at the stage of investigation contemplated u/s 40, it cannot be stated that a person summoned is in the position of an

accused or that he is obliged to give evidence in any criminal proceedings before a Police Officer. Section 40 of the FERA has deliberately and

purposely conferred wide powers for securing all or any of the person, who can assist the progress of the investigation in order to get at the real

truth before taking any positive or specific action against the actual culprit. In exercise of the powers u/s 40 of the FERA summons have been

issued and it cannot be said, it is an act without authority of law. Putting any fetters on such power amounts to placing a veil or protective umbrella

making it difficult or at times rendering it even impossible for the Enforcement Authorities to ascertain the real state of affairs in respect of a

particular contravention or aspect which they intent to investigate.

The exercise of power u/s 438 Cr.P.C. contemplates existence of two conditions, namely, an existing accusation and reasonable apprehension

of arrest on the basis of such accusation [see Thangapandi Nadar v. State, 1982 MLJ (Cri) 250]. ""Reason to believe"" is much stronger than the

expression ""reason to suspect"" and not identical with the expression ""Knowledge""; Mere ""fear"" is not ""belief"". It must be capable of being examined

by the Court objectively, because, it is then alone Court can examine whether applicant has reason to believe that he may be arrested. In order to

successfully invoke the jurisdiction u/s 438 Cr.P.C. the petitioner has to make out a special case to secure an order of anticipatory bail which is of

an exceptional type. He must prove that the charge levelled against him is mala fide and, stems from ulterior motive and it is for the petitioner to

prima facie substantiate his allegation that the charge of serious non-bailable offence against him has been levelled mala fide [see Mahanthagouda

and Another Vs. State of Karnataka, ]. The High Court of Kerala in Thayyanbadi Meethal Kunhiraman and Another Vs. S.I. of Police, has held

that a mere apprehension of arrest will not suffice. That means apprehension must be reasonable and based on existing facts. Imaginary accusation

or future possible accusations will not be sufficient. On such accusations which are yet to come there cannot be any reasonable apprehension of an

existing threat of arrest. It is a condition, precedent for an application u/s 438 that there must be an existing reasonable apprehension of arrest on

an existing accusation of having already committed a non-bailable offence prior to the point of time of filing the application. That accusation will

have to be specified in the application and the direction to be sought for is for the release in case of arrest in connection with that accusation. In

Sankaranarayanan v. Sub-Inspector of Police, 1983 M.L.J. (Cri) 13 this court has held that where the accused asserting that he may be arrested,

State on the other hand contending that so far no case has been registered against the petitioner, the grant of anticipatory bail on the basis of vague

and general allegation amounts to harming oneself in perpetuity against a possible arrest.

In the instant case, all that is required is that he should appear before the authority and to join investigation proceeding and to assist the

investigating agency in the matter for which he is summoned. Whether he is an active partner or having any sort of involvement in any foreign

exchange and his role in J.J. T.V. Private Limited, are all matters to be ascertained only when he appears in pursuance of summons issued and

each case depends upon its own facts and circumstances. When he is connected with J.J. T.V. as one of the Partner and investigation is going on

in connection with the sources of funds for purchase of Kodanadu Tea Estate at Kothagiri and petitioner and other partners in J.J. T.V. Private

Limited being closely inter-related having financial transactions, when certain persons have already been examined and some more are still to be

examined including the petitioner, granting of anticipatory bail amounts to putting spokes in the wheels of investigation and ultimately it may hamper

the investigation and render it nugatory and defeat the very purpose and scope of FERA, 1973. Having regard to the scheme of the FERA, 1973,

it is not proper to grant anticipatory bail, which amounts to fetters on the powers conferred under the Act. This Court has deprecated the

repulsiveness exhibited to the summons issued under S. 40 of the FERA holding it wholly unjustified and unwarranted in law. It is too much to

presume at this stage about the probable actions of the respondent and it is also not warranted in a given case. The arrest of another person when

appeared cannot be taken as the basis to infer arrest at the hands of the respondent. In the instant case, the respondent has issued summons calling

upon to join the investigation. The FERA, 1973 empowers the Officer under S. 35 how to act in case he has reason to believe that any person has

been guilty of offence under the Act. Traditionally, Court seeks to avoid any appearance of invading jurisdiction of an authority vested under the

statute. The agency entrusted with duty must carry out its work to the logical end without any hindrance from any quarter. When the investigation

under the Act is one affecting the economy of the Nation, releasing a person is nothing but putting fetters to the powers conferred under the Act.

When the authority is vigorously involved in probing a matter touching the FERA, would normally be inapt to exercise the power, as it amounts to

hindrance in the process of investigation. The authorities are bound by the law or procedure contemplated under the Act to enforce such

procedure for purpose of discharging their functions under the Act, to probe the matter in respect of which they are seized cannot be termed as

illegal and power to release is conferred depending upon the nature of investigation. The petitioner can always resort to such course at the

appropriate stage. At this stage of answering a summon, it is not proper to presume that he is an accused. That amounts to prejudging the matter

without material. Anticipatory bail provision is incorporated mainly in order to relieve a person from being disgraced by trumped up charges or

from malicious humiliation. The care has to be taken before exercising the power under S. 438, Cr.P.C. that such exercise does not become a

sword in the hands of the unscrupulous persons to gain time for destroying the incriminating, evidence against them and to mock at the legitimate

investigative processes authorised by the law. I see no accusation and reasonable apprehension of being arrested in a non-bailable offence, for the

present. All that he is required to do is only to join the investigation. Hence, I see no merit in the petition. Accordingly, the petition is dismissed.

Petition dismissed.