Mohan Sen vs Union Of India (Uoi)
1997 Latest Caselaw 1067 Del

JUDGMENT

Arun Kumar, J.

1. The main grievance of the petitioner is that the sale proceeds of a transaction entered into by petitioner with another authorised full fledged money changer have been withheld by the Respondent No. 1. The petitioner is an authorised dealer in foreign exchange. The petitioner sold foreign currency to M/s. Tiruchi Enterprises, who according to the petitioner, is also an authorised full fledged money changer. A photocopy of the licence issued by the Reserve Bank of India in favour of M/s. Tiruchi Enterprises in this behalf has been annexed with the petition. The fact that M/s. Tiruchi Enterprises is a licensed money exchange dealer has not been disputed by Respondent No. 1. The sale consideration of the foreign currency was received by the petitioner from M/s. Tiruchi Enterprises by way of two demand drafts of the total value of Rs. 47,58,000/- approx. These demand drafts were deposited by the petitioner with his banker, i.e., Respondent No. 2. Thereafter the money appears to have been confiscated by the Respondent No. 1.

2. The learned Counsel appearing for the petitioner submits that the purported action of the Respondent No. 1 cannot be justified under Section 110 read with Sections 111 and 113 of the Customs Act. It is submitted that there is neither any import nor any export of goods in this case. Both, the parties, i.e. the seller and the purchaser are authorised full-fledged money changers. The transactions of sale and purchase of foreign currency between such dealers are permitted under the law.

3. The learned Counsel (appearing for Respondent No. 1 is unable to satisfy me about the power of Respondent No. 1 to confiscate the said money in the facts of the present case. Sections 110, 111 and 113 of Customs Act are not at all available to the respondent. Faced with this situation, the learned Counsel for Respondent No. 1 tried to bank upon Section 121 of the Customs Act. Section 121 refers to confiscation of sale proceeds of smuggled goods. In the present case no smuggled goods are involved and, therefore, Section 121 is not attracted at all. Thus, the Respondent No. 1 is unable to justify the impugned action with reference to any of the relevant provisions of the Customs Act.

4. Lastly, the learned Counsel for Respondent No. 1 submitted that a show cause notice has already been issued to the petitioner and other parties involved and the parties should join the adjudication proceedings and await the result thereof. When the impugned action in the very first instance appears to be wholly unwarranted and illegal, I find no justification for argument that the parties should first continue with the adjudication proceedings. Under the circumstances the Respondent No. 1 is directed release forthwith the entire amount belonging to the petitioner which they have seized from Respondent No. 2, the petitioner's bankers.

5. This writ petition stands disposed of.

6. Copies of the order be given dasti to learned Counsel for parties.