In a significant ruling, the Delhi High Court has clarified that the special protections afforded to women under the Code of Criminal Procedure (CrPC) cannot be invoked during investigations under the Foreign Exchange Management Act (Fema). The court emphasized that Fema proceedings are civil-administrative in nature, distinct from criminal inquiries.
Court Dismisses Petition Against ED Summons
The judgment was delivered by Justice Neena Bansal Krishna while dismissing a writ petition filed by a 53-year-old Canadian citizen. The petitioner had challenged summons issued by the Enforcement Directorate (ED) under Section 37 of Fema, which required her to appear for recording her statement. Her primary contention was that, as a woman, she could not be compelled to appear at the ED office and that her statement must be recorded at her residence, citing CrPC Section 160(1).
This section of the CrPC generally prevents women from being required to appear at any place other than their residence for the purpose of investigation. However, the High Court firmly rejected this argument, drawing a clear line between criminal and civil law procedures.
Civil vs. Criminal: A Key Legal Distinction
The court provided a detailed rationale for its decision, highlighting the fundamental differences between the statutory frameworks of Fema and criminal laws like the Prevention of Money Laundering Act (PMLA).
The court observed that PMLA and Fema have distinct statutory frameworks and nature of proceedings. It noted that Section 50 of the PMLA confers criminal investigative powers on the ED for inquiries related to money laundering, which is a scheduled offence leading to criminal prosecution. In contrast, Section 37 of Fema is primarily concerned with civil-administrative investigations into foreign exchange contraventions, operating under a regulatory framework separate from criminal law.
"Secondly, there is a difference in the scope of summons and procedural safeguards," the court stated, underscoring that the protections embedded in criminal procedure codes do not automatically extend to civil regulatory processes.
No Basis for Insisting on Residence Interview
Justice Krishna pointed out a crucial gap in the petitioner's argument: the civil code contains no provision analogous to Section 160 of the CrPC that mandates the recording of a woman's statement at her residence.
"The insistence of the petitioner for not appearing before the authority is, therefore, without any basis," Justice Krishna observed in the ruling. The court further clarified that the powers regarding discovery and production of evidence under Section 37 of Fema are similar to those under Section 131 of the Income Tax Act, which is also governed by the civil code. Therefore, the gender-specific safeguard of CrPC Section 160 would not be applicable in such scenarios.
This ruling sets an important precedent, delineating the boundaries of procedural safeguards available to individuals during investigations by agencies like the ED, depending on whether the probe is under a criminal statute or a civil-regulatory law like Fema.
