Smt. Poonam Gahllot Vs Directorate of Enforcement (Delhi High Court)
The petitioner filed a writ petition under Article 226 of the Constitution read with Section 482 Cr.P.C. seeking directions that the Enforcement Directorate (ED) not insist on her personal appearance in response to summons issued under Section 37 of FEMA read with Section 131 of the Income Tax Act, and that she be permitted to appear through counsel. The petitioner, a 53-year-old Canadian citizen residing in New Delhi, narrated that her family premises were searched by officials claiming to be from the Income Tax Department in October 2018. She alleged that the officials ransacked the property, threatened her family members, and did not include any lady official. Subsequent to the search, the ED issued summons dated 27.11.2018 requiring her personal appearance and production of documents. The petitioner sought adjournment citing illness of family members, and later her own illness, and submitted the required documents. She also asserted that, as a woman, she could not be compelled to appear at the ED office and relied on a Delhi High Court Division Bench judgment in Asmita Agrawal. She further submitted that the ED could record her statement at her residence.
Despite her requests, the ED issued a third summons requiring her personal appearance. The petitioner contended that Section 160 Cr.P.C. exempts women from appearing at any place other than their residence. She argued that Section 4(2) Cr.P.C. applies the Code where a special statute does not provide for procedure, and that FEMA contains no provision specifying where examination of women should occur. She further submitted that Section 37(3) FEMA incorporates powers of the Income Tax authorities, including Section 132 ITA on search and seizure, making Cr.P.C. safeguards applicable. Reliance was placed on the Supreme Court judgment in Nandini Satpathy, which held that women cannot be summoned to police stations under Section 160 Cr.P.C. The petitioner asserted that the ED’s reliance on Nalini Chidambaram was misplaced, as that judgment concerned PMLA, not FEMA, and was under challenge before the Supreme Court.
The petitioner also contended that she had fully cooperated, supplied documents, and sought disclosure of material relied upon by the ED. She argued that non-supply of such material violated Articles 14, 20, and 21 of the Constitution and impeded her ability to make an effective statement.
The ED argued that Section 160 Cr.P.C. is a general provision applicable to offences under Cr.P.C., and applies only when no procedure is prescribed under a special statute. It submitted that the Supreme Court in Abhishek Banerjee held that summons under Section 50 PMLA are distinct from Cr.P.C. safeguards, and FEMA should be treated similarly. The summons were therefore validly issued, and the petitioner must appear.
The Court examined whether Cr.P.C. safeguards apply to summons under Section 37 FEMA. Section 37, part of Chapter VI of FEMA, grants ED officers investigative powers, including issuance of summons. Section 37(3) states that officers shall exercise powers conferred on Income Tax authorities under the Income Tax Act, subject to limitations in that Act. The Court reviewed the nature of proceedings under FEMA, citing the decision in A. Mansoor, which held that FEMA contraventions involve civil consequences, with penalties but not offences. It outlined the distinction under the Income Tax Act between Section 131 (powers regarding discovery, production of evidence, governed by Civil Procedure Code) and Section 132 (search and seizure, governed by Cr.P.C.). The Court found that Section 37 FEMA contains an additional “etc.” that broadens its scope beyond search and seizure to include attendance and production of documents. It concluded that discovery and production of evidence under FEMA aligns with Section 131 ITA and is governed by the Civil Procedure Code, whereas Cr.P.C. applies only to search and seizure functions.
The Court referred to decisions including Avinash Bhosale, Giribabu, and Datchinamurthy to reiterate that officers exercising powers of discovery and attendance under statutes like ITA and FEMA operate under Civil Procedure Code powers similar to a civil court. The Court held that reliance on Abhishek Banerjee was misplaced because PMLA involves criminal proceedings and Section 50 PMLA overrides certain Cr.P.C. safeguards, whereas FEMA inquiries are civil-administrative in nature. The procedural landscape under FEMA therefore differs fundamentally from PMLA.
The Court held that Section 160 Cr.P.C. does not apply to summons issued under Section 37 FEMA for production of evidence and recording statements. As the summons were issued under Section 37 FEMA read with Section 131 ITA, which incorporates civil procedural powers, there is no statutory requirement that a woman’s statement be recorded at her residence. The Court concluded that the petitioner’s insistence on exemption from personal appearance lacked legal basis.
Accordingly, the writ petition was dismissed, and pending applications were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
