Case Note & Summary
The petitioner, Mr. Kirit R. Kanakiya, filed a Criminal Writ Petition before the Bombay High Court challenging the withholding of his passport by the Enforcement Directorate (respondents). The passport was withheld on the ground that the petitioner had not paid a penalty of Rs.15 lacs imposed under the Foreign Exchange Management Act, 1999 (FEMA). The petitioner had deposited Rs.3 lacs at the time of filing appeals against the penalty order. However, the appellate authority under FEMA had not been constituted, leaving the petitioner without any effective remedy to challenge the penalty or seek stay. The court observed that the respondents had no justification to withhold the passport, especially since the petitioner was unable to agitate against the penalty order due to the non-constitution of the appellate authority. However, the court noted that a blanket order for return of the passport could not be issued as the penalty matter was still pending adjudication. Consequently, the court directed the respondents to return the passport to the petitioner within two weeks, subject to the condition that the petitioner deposits the balance penalty amount of Rs.12 lacs within four weeks and furnishes an undertaking that he will not travel abroad without prior permission of the court. The petition was disposed of with these directions.
Headnote
A) Passport Law - Withholding of Passport - Penalty under FEMA - Right to Travel - The petitioner's passport was withheld by the Enforcement Directorate for non-payment of penalty of Rs.15 lacs imposed under FEMA. The appellate authority was not constituted, preventing the petitioner from seeking stay. The court held that withholding the passport was unjustified in the absence of a functioning appellate authority, but directed return of passport subject to the condition that the petitioner deposits the balance penalty amount of Rs.12 lacs within four weeks and furnishes an undertaking not to travel abroad without court permission. (Paras 1-3)
Issue of Consideration
Whether the respondents were justified in withholding the petitioner's passport on the ground of non-payment of penalty imposed under the Foreign Exchange Management Act, 1999, when the appellate authority has not been constituted.
Final Decision
The court directed the respondents to return the passport to the petitioner within two weeks, subject to the condition that the petitioner deposits the balance penalty amount of Rs.12 lacs within four weeks and furnishes an undertaking that he will not travel abroad without prior permission of the court. The petition was disposed of accordingly.
Law Points
- Passport cannot be withheld solely for non-payment of penalty when appellate authority is not constituted
- Right to travel is a fundamental right but subject to reasonable restrictions
- Court can impose conditions for return of passport pending appeal
Case Details
2005 LawText (BOM) (03) 59
Criminal Writ Petition No. 351 of 2005
R.M.S. Khandeparkar, P.V. Kakade
Mr. Shirish Gupte with Prakash Naik for the petitioner; Mr. D.N. Salvi for Respondent Nos. 1 to 3; Mr. D.S. Mhaispurkar, A.P.P. for the Resp.No.4
Enforcement Directorate, Government of India, Ministry of Finance, Deptt. of Revenue; Enforcement Directorate (Foreign Exchange Management Act); Union of India; State of Maharashtra
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Nature of Litigation
Criminal Writ Petition challenging the withholding of passport by the Enforcement Directorate.
Remedy Sought
The petitioner sought the return of his passport which was withheld by the respondents.
Filing Reason
The petitioner's passport was withheld on the ground of non-payment of penalty imposed under FEMA, and the appellate authority was not constituted, leaving the petitioner without remedy.
Issues
Whether the respondents were justified in withholding the petitioner's passport for non-payment of penalty when the appellate authority is not constituted.
Submissions/Arguments
The petitioner argued that the withholding of passport was unjustified as the appellate authority was not constituted, preventing him from seeking stay of the penalty order.
The respondents contended that the passport was withheld due to non-payment of the penalty amount.
Ratio Decidendi
The withholding of a passport solely for non-payment of a penalty under FEMA is unjustified when the appellate authority is not constituted, as it deprives the petitioner of an effective remedy. However, the court may impose conditions for the return of the passport, such as deposit of the balance penalty and an undertaking not to travel abroad without permission, to balance the interests of the parties.
Judgment Excerpts
The only grievance of the petitioner in this petition is that the passport of the petitioner has been wrongfully withheld by the respondents on the allegation that the petitioner has not paid the penalty amount imposed by the petitioner.
Undisputedly, the penalty amount imposed in adjudication order is Rs.15 lacs and out of that, Rs.3 lacs have been deposited at the time of filing of appeals by the petitioner against the order imposing the penalty.
It is also undisputed fact that the appellate authority has not been constituted and, therefore, the petitioner is handicapped in obtaining any relief on the application for stay filed by the petitioner alongwith the appeals filed by the petitioner challenging the penalty amount.
In the circumstances, therefore, there is absolutely no justification for the respondents to withhold the passport and more so in view of the fact that no appropriate appellate authority has been constituted to enable the petitioner to agitate against the order imposing penalty.
However, since the penalty amount has been imposed and the matter has to be adjudicated by the appellate authority, the blanket order for return of the passport cannot be issued.
Procedural History
The petitioner filed Criminal Writ Petition No. 351 of 2005 before the Bombay High Court challenging the withholding of his passport by the Enforcement Directorate. The court heard the matter and passed the judgment on 9th March 2005.
Acts & Sections
- Foreign Exchange Management Act, 1999:
