RAMANUJAM J. - (1.)THE petitioner's premises was searched by the officers of the Enforcement Directorate on June 24, 1973, under section 19D of the Foreign Exchange Regulation Act, 1947, hereinafter referred to as the Exchange Regulation Act, and some documents including savings bank account and fixed deposit receipts for Rs. 50, 000 had been seized. THE petitioner issued a cheque on the third respondent bank on June 26, 1973, for a sum of Rs. 2, 000 but the third respondent refused to honour it on the ground that her accounts were blocked under the Regulation Act by the second respondent on July 6, 1973. In this writ petition the petitioner questions the validity of the said blocking of the petitioner's bank accounts by the first and second respondents on the following grounds: (1) That either of the respondents Nos. 1 or 2 had no power under the provisions of the said Act to block the bank accounts.
(2.)SECTION 20(3) of the Exchange Regulation Act under which the second respondent has purported to act does not apply to the facts of this case and that, in any event, the said section does not empower the second respondent to block the accounts of the petitioner who is an independent citizen resident in India.
The second respondent is an authority separate and distinct from the directorate of enforcement and, therefore, it cannot merely block the petitioner's bank account on the instructions of the first respondent without applying its own mind.

(3.)SECTION 20(3) of the Regulation Act violates articles 14 and 19(1)(f) and (g) of the Constitution of India. According to the petitioner the sum of Rs. 50, 000 and odd which was lying in deposit in the petitioner savings bank account has been fully accounted for with reference to the Indian income and that if a notice had been given prior to the said blocking of the petitioner's bank account, she could have easily satisfied the second respondent that the amounts deposited with the third respondent bank has nothing to do with the Exchange Regulation Act.The first respondent in his counter has stated that on the basis of reliable information the premises of the petitioner was searched on June 24, 1973, and the search resulted in the seizure of incriminating documents in the form of bank passbook, account book, foreign aerogramme, etc., containing details of money transactions made by the petitioner's husband, Shri Hayum, that on interrogation with reference to the seized documents the petitioner had admitted that her husband used to receive and make payments unauthorisedly as per the instructions of one Ibrahim of Penang, that her husband used to deposit the monies received through illicit channels in the savings bank account No. 812 standing in the joint names of herself and her husband with the third respondent, that the balance left over in the said savings bank account was Rs. 52, 072.03 out of which a sum of Rs. 50, 000 was withdrawn through cheques on February 16, 1973, and deposited as fixed deposit in the names of herself and her brother and that on the basis of the said statement the amount of Rs. 52, 082.09 was blocked by the second respondent on the instructions of the first respondent. It is also stated that investigation has been completed and a show-cause notice as to why she should not be proceeded against for the contravention of the provisions of section 5(1)(c) read with section 23B of the Exchange Regulation Act has already been issued on June 5, 1974, and that another show-cause notice dated August 12, 1974, under section 5(1)(aa) has also been issued to the petitioner asking her to show cause as to why the sum of Rs. 50, 000 lying in fixed deposit and a sum of Rs. 2, 072.09 lying in the joint savings bank account No. 812 should not be confiscated and for her having received payments amounting to Rs. 75, 000 by order of a person residing outside India. It is further contended that in view of the pendency of the proceedings for contravention of the provisions of the said Act and for confiscation of the amounts involved, the blocking of the petitioner's bank account has become necessary as a precautionary measure and that such blocking of the bank account is quite legal and valid. As regards the legal contentions raised by the petitioner, the first respondent's stand is that though he has no power to straightaway direct the third respondent to block the petitioner's bank-account, the second respondent is empowered to issue suitable directions under section 20(3) of the Act to the third respondent blocking the bank account, that section 20(3) does not contemplate a prior notice before the directions are given under that section, that the said section is not unconstitutional as violating article 14 or article 19(1)(f) and (g) and that section 20(3) can also be invoked in respect of Indian citizen resident in India if the circumstances warrant the issue of a direction under that section by the second respondent. It is also stated that if the petitioner is in a position to fully account for the said sum of Rs. 52, 072.09, she could as well file representation to the above show-cause notice issued and convince the authority who is adjudicating her case that no violation of the provisions of the Act has taken place. In these circumstances, the first respondent submits that the question of releasing the amount or confiscating the same will arise only at the time of the adjudication of the case and it is too premature on the part of the petitioner to seek for the release of the amount before the proposed adjudication and that if the amount is released pending adjudication proceedings it will result not only in the money being lost but it would also involve cumbersome recovery proceedings if ultimately the petitioner is found to be guilty of the offences under the said Act and the amount is held liable for confiscation.The second respondent has in its counter-affidavit stated that since the amounts covered by the fixed deposit as well as the savings bank account were involved in an offence under the provisions of the said Act, the first respondent made a request to issue directions to the third respondent directing it not to make any payment towards the fixed deposit or towards the savings bank account and that after receipt of that request from the first respondent it felt, after consideration of all the materials placed before it, that it is expedient for the purpose of securing compliance with the provisions of the Regulation Act to advise the third respondent that the balance in the savings bank account is at no time reduced below Rs. 2, 072.09 and the fixed deposit account is not reduced below Rs. 50, 000 or the account closed or transferred to any other office. The second respondent submits that the directions it had given under section 20(3) are quite legal and valid, that the power conferred under section 20(3) is incidental or ancillary to the duty cast on it under the other provisions of the Act, that the direction has been issued to secure compliance with the provisions of the Act, that the petitioner has also admitted that the amounts in the accounts related to the amounts received in India in contravention of the said Act, that it has got the power and duty to see that such amount is not taken away beyond the reach of the first respondent pending adjudication proceedings.