The Delhi High Court has ruled that summons issued under Foreign Exchange Management Act, 1999 (FEMA) for discovery and production of evidence are governed by the procedures under Code of Civil Procedure, 1908 (CPC), and not by the procedural norms of Code of Criminal Procedure, 1973 (CrPC). The judgment came in a case where the petitioner, a Canadian citizen named Poonam Gahhlot, challenged a summon issued by Directorate of Enforcement (ED) under Section 37 of FEMA. She argued that being a woman, she was entitled under Section 160 of CrPC to have her statement recorded only at her residence and not at the ED’s office.
The Court rejected this contention, explaining that the summons under Section 37 of FEMA relate to a civil–administrative process for foreign exchange regulation and evidence collection, not a criminal investigation. As such, the CPC applies. The Court held that in this context, procedural safeguards meant for criminal investigations under CrPC — including the gender-based protections under Section 160 CrPC — do not hold. In reaching this conclusion, the Court observed that the powers under Section 37 of FEMA are analogous to those conferred under Section 131 of the Income-Tax Act, which also falls under the civil code.
The Court distinguished proceedings under the Prevention of Money Laundering Act, 2002 (PMLA), which involve criminal investigations and thus may attract CrPC provisions, from those under FEMA. It clarified that when it comes to search and seizure or criminal-offence investigations, CrPC would apply; but summons for production of documents and statements under FEMA are part of civil-administrative regulation.
Accordingly, the Court declined the request to allow representation through counsel in lieu of personal appearance and dismissed the petitioner’s plea that ED cannot insist on her personal appearance at their office. The ruling thereby upholds the validity of FEMA-based summons for women to appear at the offices of ED, without invoking the procedural shield of Section 160 CrPC.
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