Passport cannot be suspended/revoked for non-appearance in investigation proceedings under FEMA, Delhi HC

The Delhi High Court has held that a passport cannot be suspended or revoked under Section 10(3)(c) of the Passports Act on account of non-appearance before an investigation authority pursuant to proceedings under the Foreign Exchange Management Act, 1999..The order was passed by a Single Judge Bench of Justice Vibhu Bakhru in a petition by a Non-Resident Indian, Junaid Iqbal Mohammed Memon. The Petitioner had assailed an order by the Consulate General of India, Dubai, which suspended his passport on the ground that he had failed to appear in person before the Enforcement Directorate (ED) in connection with the alleged violation of FEMA provisions..The Petitioner contended that the impounding of his passport was arbitrary as it was not based on any relevant material. He further contended that since he is an NRI, he was not covered by the provisions of FEMA..The respondents, on the other hand, contended that Section 3 of FEMA covered resident, non-resident and foreign nationals. It was also stated that various Regulations of FEMA were applicable to NRIs and Person Resident Outside India..After hearing the parties, the Court concluded that the Petitioner’s passport was suspended solely on the request made by ED, in the interest of the general public..Relying on a judgment passed by a Division Bench of the High Court, the Court recorded that there was a material difference between the provisions of FEMA and the Foreign Exchange Regulation Act, 1973 (FERA). It noticed that under FEMA, there was no provision for arrest or criminal prosecution as provided under Section 35 and 56 of FERA. Further, the power conferred on the officers of the Directorate of Enforcement by Section 39 of FERA to examine persons also did not find a place in FEMA..The Court further observed that the present case pertained to an alleged violation of provisions of Section 13 of FEMA, which “would result in the concerned officer making a complaint to the adjudicating authority under Section 16 of the FEMA”..On such complaint being made, the adjudicating authority would hold an enquiry under Section 16(1) of FEMA..Even at that stage, the person accused has the option to either appear in person or by taking the assistance of a legal practitioner or a chartered accountant of his choice for presenting his case before the adjudicating authority by virtue of Section 16(4) of FEMA, the Court stated..The Court reiterated that provisions of FEMA did not entail custodial interrogation and, therefore, an alternative mode of examination under video conferencing was an option available to the ED..In the present case, the Petitioner had voluntarily agreed to appear by teleconferencing and also made all the arrangements for the same. The request was, however, not accepted by ED. In spite of the objections with respect to the disclosure, the Petitioner also provided all documents as required by the ED. ED still insisted on Petitioner’s presence on the ground that he had to be confronted with certain documents..Given the facts and the decision of the Division Bench, the Court opined that the Petitioner’s passport could not have been suspended in public interest..It nonetheless stated that a passport can be cancelled in cases where offence alleged to have been committed by the holder of passport is pending before a criminal court in India in terms of Section 10(1)(e) of the Passports Act. Further, in terms of Section 10(3)(h) of the Passports Act, a passport can be cancelled if a warrant or summons for the appearance, or a warrant for the arrest of the holder of the passport, has been issued by a Court under any law for the time being in force..Therefore, if a criminal prosecution as contemplated under Section 13(1C) of FEMA is commenced by filing a criminal complaint and summons is issued by a competent court, the passport facilities provided to the accused could be withdrawn by virtue of Section 10(3)(h) of the Passports Act..In view of the above, the Court set aside the order suspending the petitioner’s passport..The Petitioner was represented by Senior Advocate Parag P Tripathi with Advocates Saurabh Kripal, Ranjeeta Rohatgi, Abhishek Thakral, Mishika Bajpai and Girish Pikhale..ED was represented by Standing Counsel Amit Mahajan with Advocate Mallika Hiremath..Centre was represented by Standing Counsel Dev P Bhardwaj with Advocate Jatin Teotia..Read the judgement below.