Delhi High Court Dismisses Plea by Woman Seeking Exemption From Personal Appearance Before ED Under FEMA Summons [READ ORDER]

The Delhi High Court has rejected a petition filed by Smt. Poonam Gahllot, a Canadian citizen residing in New Delhi, who sought exemption from personally appearing before the Enforcement Directorate (ED) in connection with an ongoing inquiry under the Foreign Exchange Management Act (FEMA). 

The bench of Justice Neena Bansal Krishna observed that the procedural protections under Section 160 of the Code of Criminal Procedure (CrPC)—including the provision that a woman cannot be summoned to any place other than her residence—do not apply to proceedings under FEMA. 

The petitioner had approached the High Court challenging multiple summons issued by the ED under Section 37 of FEMA read with Section 131 of the Income Tax Act (ITA). The agency sought her personal appearance along with documents relating to alleged contraventions involving foreign assets.

According to the petition, the dispute began following an Income Tax Department visit to her son’s residence in October 2018, during which she alleged that officials “virtually ransacked the premises” and restricted family members from moving out. 

Subsequently, the ED issued summons directing her to appear in person. The petitioner argued that as a woman, she could not be compelled to attend the ED office and relied heavily on Section 160(1) CrPC and case laws including Nandini Satpathy v. P.L. Dani and Asmita Agrawal v. ED. She also sought the right to be represented through counsel and requested access to all materials relied upon by the ED. 

The petitioner contended that section 160(1) CrPC applies, and therefore a woman witness cannot be required to appear anywhere except at her residence. Since FEMA incorporates powers similar to those under the Income Tax Act, and IT Act’s search provisions invoke the CrPC, the ED cannot compel her personal appearance. FEMA is a civil law with no criminal consequences; therefore, coercive measures requiring physical attendance were unjustified. She had already submitted all documents and expressed willingness to cooperate. The ED must supply all materials forming the basis of the summons to ensure her fundamental rights under Articles 14, 20, and 21 of the Constitution. 

ED contended that Section 160 CrPC does not apply, as FEMA is a special statute with its own procedure. The summons under Section 37 FEMA cannot be equated with CrPC provisions governing police investigations. Reliance was placed on the Supreme Court’s ruling in Abhishek Banerjee v. Directorate of Enforcement, which held that summons issued under special statutes like PMLA override Section 160 CrPC. FEMA summons are investigatory and mandatory, and personal appearance is essential for effective inquiry. 

Justice Neena Bansal Krishna undertook a detailed examination of Section 37 of FEMA and its interplay with the Income Tax Act and CrPC. The Court highlighted several key principles:

1. FEMA Proceedings Are Civil, Not Criminal

The Court emphasized that FEMA is a civil regulatory statute dealing with monetary penalties, not criminal prosecution. The earlier penal framework of FERA has been dismantled. Therefore, insistence on CrPC protections applicable to criminal investigations is misplaced. 

2. Section 37 FEMA Resembles Section 131 ITA (Civil Procedure)

The Court clarified that:

• Section 131 ITA powers—concerning discovery, attendance, and production of documents—are derived from the Civil Procedure Code (CPC), not CrPC.
• CrPC applies only to search and seizure under Section 132 ITA, not to ordinary summons for evidence.
• Since FEMA’s Section 37 lumps various powers together (search, seizure, etc.), the “etc.” includes powers equivalent to Section 131 ITA, which fall squarely in the civil domain. 

3. Section 160 CrPC Not Applicable

Because the relevant FEMA proceedings are akin to civil inquiries, the gender-based protection under Section 160 CrPC is inapplicable.
Civil law contains no equivalent provision requiring a woman’s statement to be recorded at her residence. 

4. Distinction From PMLA

The Court rejected ED’s heavy reliance on Abhishek Banerjee, observing that:

• PMLA involves criminal investigation of money laundering, a serious offence.
• FEMA involves civil contraventions and penalties.
  Thus, PMLA jurisprudence cannot be transplanted into the FEMA framework.
  SMT. POONAM GAHLLOT

The Court held that the ED was legally entitled to summon the petitioner to its office for recording her statement and examining documents.

The writ petition was dismissed, and no relief was granted regarding exemption from personal appearance or the request for ED to visit her residence for statement recording.

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