Case Note & Summary
The case arose from two writ petitions filed under Article 32 of the Constitution challenging summons issued under Section 19F of the Foreign Exchange Regulation Act, 1947 by the Deputy Director, Enforcement Directorate. The petitioner in Writ Petition No. 164 of 1972, Ramanlal Bhogilal Shah, had served as General Manager of United Commercial Bank Ltd. until January 17, 1968, then as Chairman and whole-time Director, and after nationalisation of the bank, as Custodian until September 1, 1971. On June 4, 1966, the United Commercial Bank booked a forward exchange contract for Hindustan Motors for pound 9,32,617 at the rate of 1s. 5 29/32d per rupee. The rupee was devalued on June 6, 1966. On May 24, 1971, the petitioner was served with summons under Section 19F of the Exchange Act to give evidence in an enquiry being conducted by D.K. Guha, Deputy Director, Enforcement Directorate, into certain offences under the Exchange Act. He was examined on June 3, 16 and 17, 1971, and according to the petitioner, the entire examination related to the booking of the said forward exchange contract. On August 31, 1971, the petitioner was arrested under Section 19B of the Exchange Act. The grounds of arrest were elaborate and detailed reasons why the enforcement officer believed the petitioner had been guilty of offences under Section 4(2) and Section 22 of the Exchange Act punishable under Section 23. The petitioner was produced before the Chief Presidency Magistrate, Calcutta, who released him on bail of Rs. 10,000 with a direction to contact the investigating officer. On November 9, 1971, an FIR was recorded under Section 154 of the Code of Criminal Procedure by the DSP, CBI, New Delhi, and an order was obtained from the Chief Presidency Magistrate, Calcutta, on November 25, 1971, permitting investigation under Section 155(2) of the Code of Criminal Procedure. The offences alleged in the FIR were Section 120B read with Section 420 of the Indian Penal Code and Section 4(2) read with Section 23(1)(b) of the Exchange Act; the names and addresses of the accused were given as the management and other officers of the United Commercial Bank and the management and officers of Hindustan Motors Ltd. On April 17, 1972, another summons was issued under Section 19F of the Exchange Act to the petitioner to appear before the Deputy Director, Enforcement Directorate and give evidence regarding the exchange contract transaction. The petitioner objected and filed the writ petition. The core legal issues were whether the petitioner became a person accused of an offence under Article 20(3) after the lodging of the FIR, whether the summons to appear and give evidence under Section 19F was illegal as compelling him to be a witness against himself, and the scope of protection under Article 20(3). The petitioner contended that after his arrest and the recording of the FIR, he was an accused and therefore the summons was illegal and must be set aside. The respondents argued that Article 20(3) only prohibited compelled testimony that would incriminate, and did not bar the summons or answers to non-incriminating questions. The Supreme Court referred to Ramesh Chandra Mehta v. State of West Bengal, Raja Naravanlal Bansilal v. Manack Phiroz Mistry and M.P. Sharma v. Satish Chandra, and held that with the lodging of a First Information Report, a person is accused of an offence within the meaning of Article 20(3). The Court then considered State of Bombay v. Kathi Kalu Oghad and explained that the only protection Article 20(3) gives is that a person cannot be compelled to be a witness against himself; this does not mean that he need not give information regarding matters which do not tend to incriminate him. Accordingly, the Court held that the summons dated April 17, 1972 must not be set aside. The petitioner was directed to appear before the Enforcement Directorate and answer such questions as do not tend to incriminate him. Both writ petitions were disposed of accordingly.
Headnote
A) Constitutional Law - Self-Incrimination - Meaning of 'person accused of an offence' - Constitution of India, Article 20(3) - The issue was whether the petitioner, named in an FIR and previously arrested, was a person accused of an offence within Article 20(3). The Court referred to Ramesh Chandra Mehta v. State of West Bengal, Raja Naravanlal Bansilal v. Manack Phiroz Mistry and M.P. Sharma v. Satish Chandra and held that with the lodging of a First Information Report a person is accused of an offence within the meaning of Article 20(3). (Paras 439-447) B) Constitutional Law - Scope of Protection Against Self-Incrimination - Compulsion to Appear and Give Non-Incriminating Information - Constitution of India, Article 20(3) - The Court held that the protection under Article 20(3) only prevents compulsion to be a witness against himself; it does not mean that the accused need not give information regarding matters which do not tend to incriminate him. It relied on State of Bombay v. Kathi Kalu Oghad. The summons under Section 19F of the Foreign Exchange Regulation Act, 1947 was not set aside entirely; the petitioner was directed to appear before the Enforcement Directorate and answer such questions as do not tend to incriminate him. (Paras 439-447) C) Criminal Procedure - Investigation and Summons - Validity of Summons Under Section 19F of Foreign Exchange Regulation Act, 1947 - Foreign Exchange Regulation Act, 1947, Sections 19F, 19B, 4(2), 22, 23, 23C; Code of Criminal Procedure, 1898, Sections 154, 155(2) - The Court considered whether the summons issued after arrest and recording of FIR was illegal as compelling an accused to be a witness against himself. Held that the summons need not be set aside; the petitioner must appear and answer questions which do not tend to incriminate him. (Paras 439-447)
Issue of Consideration
Whether a person named in an FIR is a person accused of an offence within Article 20(3) of the Constitution; whether a summons under Section 19F of the Foreign Exchange Regulation Act, 1947 requiring such person to appear and give evidence is invalid as compelling self-incrimination; and the scope of protection under Article 20(3).
Final Decision
The Supreme Court held that with the lodging of a First Information Report, the petitioner became a person accused of an offence under Article 20(3); however, the protection under Article 20(3) only prevents compulsion to be a witness against himself and does not exempt him from appearing before the Enforcement Directorate or giving information regarding matters which do not tend to incriminate him. Accordingly, the summons dated April 17, 1972 was not set aside; the petitioner was directed to appear before the Enforcement Directorate and answer such questions as do not tend to incriminate him. Both writ petitions were disposed of accordingly.
Law Points
- Person named in an FIR is a person accused of an offence under Article 20(3) of the Constitution
- protection against self-incrimination only bars compelled incriminating testimony
- non-incriminating information must be given
- summons under Section 19F of Foreign Exchange Regulation Act
- 1947 is valid to the extent of non-incriminating questions
