V.P. Gopalan Nambiyar, J.
1. The petitioners' permises were searched on 26-9-1970 and their Post Office Savings Bank Account Book and certain other documents were seized by the Assistant Director, Enforcement Directorate, Shastri Bhavan Madras. Ext. P-l notice dated 22-12-1970, was issued to the petitioners stating that the 1st petitioner had received without general or special exemption from Reserve Bank of India four payments amounting to Rs. 24,200/- from persons other than authorised dealers in foreign exchange by order or on behalf of Shri N. Sadanandan of Malaysia and that there was a contravention of the provisions of certain specified sections of the Foreign Exchange Regulations Act 1947. He was, therefore, called upon to show cause why adjudication proceedings contemplated in S. 23-D of the Foreign Exchange Regulations Act 1947 should not be held against him for the contravention and why the amount of Rs. 20,000/- daposited in his savings bank account and Rs. 4,000/- deposited in his mother's (2nd petitioner's) account at the Post Office, Vaikom should not be confiscated to the Government. Both the petitioners submitted explanation dated 8-1-1971. In order to receive back their pass book, they sent Ext. P-2 petition dated 25-9-1971 praying for the return of the Postal Savings Bank Pass Book to Vaikom Branch. As there was no compliance with this request, petitioners moved this writ petition praying for a direction for the return of the two pass books and for a direction that any action in pursuance of Ext. P-l notice beyond one year of its retention, is illegal and for certain other consequential orders.
2. The petitioners placed reliance on Section 19-G of the Foreign Exchange Regulations Act 1947, which enables the concerned officers to retain the documents searched or seized only for a period not exceeding one year. For the Respondents, reliance is placed on the latter part of the section which allows them to retain the seized documents for a longer period, if before the expiry of the said period of one year proceedings under Section 23 have been 'commenced'. If so, under Clause (a) of Section 19-G the authorities are given the right to retain the documents until the disposal of those proceedings. It was claimed that the issuance of Ext. P-l notice on 22-12-1970 amounted to a 'commencement' of the proceedings which have not yet been disposed of, and therefore the retention of the documents was valid and proper. The question is whether this claim is well founded.
3. Section 23 of the Act provides that for contravention of certain specified sections of the Act, a person shall be liable to penalty which might be adjudged 'in the manner provided'. The manner of adjudication is provided by the following sections. Section 23-D, which is one of the important sections, reads:
'23-D. Power to adjudicate -- (1) For the purpose of adjudging under clause (a) of sub-section (1) of Section 23 whether any person has committed a contravention, the Director of Enforcement shall hold an inquiry in the prescribed manner after giving the person a reasonable opportunity of being heard and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of the said Section 23: Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion that having regard to the circumstances of the case, the penalty which he is empowered to impose would not be adequate, he shall, instead of imposing any penalty himself, make a complaint in writing to the Court.'
The manner of holding an inquiry referred to in the above section is prescribed by the Adjudication Prqceedings and Appeal Rules 1957. Rule 3 of the said Rules reads:
'3. Adjudication proceedings:-- (1) In holding an inquiry under sub-section (1) of Section 23-D for the purpose of adjudging umler clause (a) of Sub-section (1) of Section 23 whether any person has committed contravention, the Director shall, in the first instance, issue a notice to such person requiring him to show cause within such period as may be specified in the notice (being not less than ten days from the date of service thereof) why adjudication proceedings should not be held against him.
(2) Every notice under sub-rule (1) to any such person shall indicate the nature of the offence alleged to have been committed by him.
(3) If after considering the cause, if any, shown by such person, the Director is of opinion that adjudication proceedings should be held, he shall fix a date for the appearance of that person either personally or through his lawyer or other authorised representative.
(4) On the date fixed, the Director shall explain to the person proceeded against or his lawyer or authorised representative the offence alleged to have been committed by such person indicating the provisions of the Act or of the rules, directions or orders made thereunder in respect of which contravention is alleged to have taken place.' It has been held by my learned brother Isaac, J., in O. P. No. 515 of 1969 (Ker) that issuance of a notice under Section 23-D (1) of the Act as provided in Rule 3 (1) of the Rules is a sufficient commencement of th',' proceedings within the meaning of Section 19-G. The same seems to be the purport of the decision of a learned Judge of the Bombay High Court in M/s. Eastern Machinery Trading Co. v. State, AIR 1964 Bom 127 which was under Section 19-A of the Act. I am in agreement with the princi-ple of these decisions. Briefly stated, a retention of the documents beyond the period of one year is authorised by Section 19-G if any proceedings under Section 23 have been 'commenced' before the authority concerned. Section 23-D provides for the holding an inquiry in the prescribed manner after giving the person an opportunity of being heard. Rule 3 (1) ordains the issue of a pre-, liminary notice in holding the inquiry underj sub-section (1) of Section 23-D. This preliminary notice is part of the adjudicatory machinery itself and the issuance of this notice amounts to a commencement of the proceedings within the meaning of Section 19-G. No less is it so, because after issuance of this preliminary notice, on consideration of1 the explanation, the officer has to decide under sub-clause (3) of the Rule whether ad-l indication proceedings should be held, and if so, to fix the time and place for the appearance of the persons concerned. That is only a later stage of the proceedings which have been commenced by the issuance of the notice under Rule 3 (1).
4. As the proceedings were commenced by the issuance of Ext. P-l notice, the petitioner can have no possible complaint against the retention of the pass books, return of which is sought in this writ petition. I dismiss this writ petition, but make no order as to costs.