By TIOL News Service

NEW DELHI, JUNE 07, 2016: THE issue before the Bench is - Whether when there is a technical finding by Tribunal that there is no contravention of legal provisions, it amounts to abuse of legal process if criminal prosecution is continued. YES is the verdict.

Facts of the case

The Appellants were facng trial for alleged contravention of section 18(2) and 18(3) of the Act. The matter was pending before the learned Chief Metropolitan Magistrate. In the meanwhile the adjudicating authority had imposed penalty against the appellants. Agrieved appellants preferred appeal before the Appellate Tribunal for Foreign Exchange. The tribunal analysed the scheme of the provisions, scrutinized the allegations made by the Department and finally dislodged the finding of the adjudicating authority. The criminal proceedings continued. Based on the tribunal's order an application was filed under Section 245 of the Code of Criminal Procedure for discharge of the accused. The Magistrate taking note of the fact that there had been an adjudication on merits by the tribunal, ordered discharge of the appellants. Additional Sessions Judge dislodged the view expressed by the Magistrate and allowed the revision. Appellants took the matter to the High Court but failed to get any relief and hence approached the apex through SLP.

After hearing parties, the Apex Court held that,

++ the appellant could not be held guilty for Section 18(2) read with Section 18(3) of FERA Act, 1973 and the advise of the Reserve Bank of India given in its letters dated 21.1.1992 and 18.2.1994 deserved to be accepted as they were totally in consonance with legal provisions. The High Court, without an assail to the order passed by the tribunal, had adverted to the same and opined that it did not subscribe to the view expressed by the tribunal that Section 18(2) and 18(3) of the Act were not applicable to the transaction in question. The High Court could not have done that. It was noted that the High Court opined that the findings given by the tribunal were based on technical grounds and, therefore, the prosecution was liable to continue. As the judgment of the tribunal was on merits, inasmuch as findings had been recorded after analysis of facts and the conclusion had been arrived at that the appellants had not violated the provisions of the Act. In such a situation, it could not be said that it was a judgment rendered on technical grounds.

(See 2016-TIOL-81-SC-FEMA)