Seethalakshmi Nagaraj vs Chief Commr. Of Income-Tax, … on 16 March, 2001

Madras High Court
Seethalakshmi Nagaraj vs Chief Commr. Of Income-Tax, … on 16 March, 2001
Equivalent citations: 2002 (139) ELT 537 Mad
Author: R J Babu
Bench: R J Babu


R. Jayasimha Babu, J.

1. The petitioner claims to be the owner of foreign currencies that had been seized from respondents 4 and 5. The seizure was on 20-1-1996 and on that ground she seeks the relief of return to her of that foreign currency and also wants the order of 17-7-1996 by which the continued retention was authorised to be quashed.

2. There is no dispute about the fact that the foreign currency was confiscated from A.N. Dyaneswaran a member of the Indian Administrative Service and from the one Sampathkumar, a chartered accountant, both of whom are being proceeded against under the provisions of Foreign Exchange Regulation Act, 1973. The adjudication proceedings are said to be pending before the adjudicating authority. The petitioner has also been examined by the authorities of Enforcement Directorate pursuant to the notice issued to her under Section 40 of the Act and her statement has been recorded.

3. Under the provisions of the Foreign Exchange Regulation Act, 1973 foreign currency cannot be possessed or dealt with in India except under general or special permission granted by the Reserve Bank of India. Respondents 4 and 5 have not appeared in this proceedings through Counsel. Their statements recorded by the authorities do not show that it was their claim that they had any authorisation to hold the foreign currency and therefore there was no contravention of the provisions of the Act. They appear to have claimed that the money had been entrusted to them by the petitioner. It is for them to establish the truth of their assertion before the adjudicating authority and it is always open to them to examine the petitioner as a witness in support of their plea.

4. The case put forward by the petitioner is that she became a family friend of- Dyaneswaran, that she came to know Sampathkumar some 21/2 years prior to the date of seizure, that her husband was a citizen of USA, that he was employed in the Dabhol Project in Maharashtra, that he had come to India in 1995, had visited his wife and children-at Madras is 1996, had entrusted to his wife $ 10,000 in cash which he is said to have brought from USA, that the petitioner in spite of having bank; accounts which had been opened in Madras in 1994, had not chosen to deposit that money in any of the bank accounts, that when she was on casual visit to look up the mother of Dyaneswaran that she having suddenly found foreign currency in her bag, chose to entrust the same to his mother as she was to travel on that day. It is open to her to narrater her explanation before the adjudicating authority when she is examined as a witness by respondents 4 and 5.

5. In this proceedings the seizure of currency effected from respondents 4 and 5 cannot be set aside, nor can there be any direction to return that amount to the petitioner. If ultimately, the money is confiscated after the result of the adjudication and if the petitioner is still able to establish vis-a-vis respondents 4 and 5 that they had caused loss to her, it is open to her to proceed against them for recovery of the amounts which she claims to be due to her from them.

6. I do not see any merit in the writ petitions and the same are dismissed.

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