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Avtar Singh Vs. Special Director, Enforcement Directorate - Court Judgment

LegalCrystal Citation
CourtAppellate Tribunal for foreign Exchange New Delhi
Decided On
Case NumberAPPEAL NO. 405 OF 1985
Judge
AppellantAvtar Singh
RespondentSpecial Director, Enforcement Directorate
Advocates:T.K. Gadoo for the Respondent.
Excerpt:
foreign exchange regulation act, 1973 - section 9 - comparative citation: 2002 (35) scl 489 (atffe - n. delhi).....than on preponderence of probabilities. furthermore, the evidence of the attesting witnesses in criminal proceedings, the discrepancy in the name of nri on whose instructions payments were alleged to have been made and the names of the appellants brothers, lack of evidence on receipt of payment by the appellants or of any person identifying the appellant as the one who disbursed the same to other persons on the instructions received from nri, and the allegation of enemity with the officers of the respondent as gathered from the criminal prosecution against the appellant under the indian penal code ultimately resulting in the acquittal of the accused and the high courts observations on the proprietary of search conducted in the case, all tend to tilt the preponderence of probabilities.....
Judgment:

1. This is an appeal against the Order No. SDE(RS)V/Z-5/85 dated 11-6-1985

by which a penalty of Rs. 1 lakh was imposed on the appellant for contravening sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 (‘the Act).

2. In this case, four Show-Cause Notices (SCNs) dated 5-7-1979 were served upon the appellant alleging contravention of sections 9(1)(b) and 9(1)(d) and 5(1)(aa) and 5(1)(c) of Foreign Exchange Regulation Act, 1947 and calling upon him to show-cause as to why adjudication proceedings be not held against him. After holding the proceedings and hearing the Party, the Adjudicating Officer acquitted him in respect of SCN-I, III and IV, holding that there was no evidence to show that the appellant had received payment or made payments by order on behalf of the person resident of U.K. As regards SCN-II wherein the alleged contravention was for an amount of Rs. 12,13,700, the Adjudicating Officer found that the department had proved that the involvement of Rs. 2,06,200. Therefore, he reduced the receipt of payment from Rs. 12,13,700 to Rs. 2,06,200 and imposed a penalty of Rs. 1 lakh against which the present appeal has been filed.

3. It is seen that both the parties in this appeal were heard in details and both of them have filed written submissions as well. In the memorandum of appeal as well as in his written submissions, the appellants have, inter alia, stated that there was no evidence at all against the appellant. In their statements made to the Enforcement Directorate, none of the recipients either named or identified the appellant to be the person who made compensatory payment to them on behalf of any non-resident. It is further submitted that after completing the enquiries, the respondents prosecuted the appellant for contravention of section 9(1)(d) for making compensatory payments on behalf of non-residents. Five complaints were filed in the Court at Jallandhar and the appellant was discharged by the learned Magistrate in all the five complaints on 26-9-1982. Two complaints were filed against him in the Court of Kapurthala which convicted him but in appeal the Sessions Judge, Kapurthala acquitted him on 15-2-1983. One complaint was filed against the appellant in the Court at Phagwara in which he was acquitted on 1-12-1982. One complaint was filed against the appellant in the Court at Amritsar where he was discharged on 20-1-1983. The appellant, thus, submitted that he was either acquitted or discharged in all the complaints launched against him by the respondent in the Courts of competent jurisdiction and thereafter adjudication proceedings were initiated against him on the same very facts and the charges. The appellant denied the contravention and claimed that this case had been falsely made out against him on account of enemity with the officers of the respondent. The appellant submitted that nothing incriminating was recovered or seized from his residential premises. As regards the search of his shop, the appellant submitted that the documents shown to have been recovered from his shop were planted on him and these were never recovered from his shop. The search was illegal as no respectable person of the locality was made to join the search. The two witnesses who were made to join the search were not of Nakodar, but were from neighbouring villages. The appellant further maintained that Amritpal Singh under whose signatures the impugned letters dated 12-7-1974 and 16-7-1974 existed, has no concern or connection or relationship with the appellant. Furthermore, the said letters were addressed to the Manager. Associated Engineers and Transport Company, Nakodar, with whom he has no concern. The two attesting witnesses of the search categorically stated in the Courts that the search of the shop of the appellant never took place in their presence and the documents shown to have been recovered from there were never recovered and were planted to falsely implicate the appellant and they were forced to sign the Panchnama under the threat. The appellant categorically contended that not even a single witness during the course of prosecution of the appellant for these very contraventions which form the subject-matter of SCN-II, had come forward to state that he had received any amount

from the accused appellant under instructions of a non-resident. The appellant submitted that he was an agent of Associated Traders and Engineers Private Ltd. and not the Manager of Associated Engineers and Transport Co. to whom two letters were addressed. The appellant further submitted that no incriminating document whatsoever, showing any correspondence between him and Karam Chand, was recovered or seized or were brought on the record of the case. In his statement before the Enforcement Officer as well as Magistrate, Kapurthala, Shri Karam Chand has stated that he has served the appellant for about 1½ months from July, 1974 onwards but he left the job and returned to his village Khem Karan in January, 1974. This would not be possible as Karam Chand was not introduced to appellant in January, 1974. In view of the aforesaid, the appellant strongly urged that the appeal be allowed and the impugned order be quashed and set aside.

4. Shri Gadoo on behalf of the respondent submitted that the basis of holding the appellant guilty of contravention was two letters which were seized from his possession and supported by the statement of Shri Karam Chand and also the statements of 17 persons who admitted having received money on the instructions of non-residents. The said letters are stated to have been written by Amritpal Singh, the real brother of Avtar Singh. In their written submissions, the respondents have referred to and relied on the observations of the Adjudicating Officer that ‘it is not the practice that a racketeer in foreign exchange would go in person to make compensatory payments as it is a clandestine business and the racketeer would like to keep his identity hidden. Hence, the mere fact that the recipients have not been able to identity Avtar Singh as the person who came to make the payments is not likely to hit this case as it is clear from the documents that it was he who received the instructions from London and, it therefore follows that payments made on his instructions can be only by Avtar Singh either personally or through his agent. The respondents admitted that the appellant was acquitted by the Courts for the same contravention but further submitted that the cases before the Magistrates were not properly conducted by the Departmental Advocate as is clear from the Judgment that the Magistrates gave his conclusion that there was not enough evidence on the basis of which the appellant could be convicted. The appellant has, thus, been given the benefit of doubt and discharged. The respondents submitted that the standard of proof in a criminal prosecution before a criminal court is on different footing when compared with the standard of proof before the Adjudicating Officer where preponderence of probabilities would be a guiding factor and proof beyond reasonable doubt relevant in criminal prosecution before a criminal court cannot be bodily lifted and transplanted in adjudication proceedings. In support of this the rely in the case of Jai Prakash Chawla v. Collector of Customs, 1987 (28) E.L.T. 153 (Tribunal).

5. The appellant made further submissions stating that Amritpal Singh, whose name appeared in the two letters is not his brother. The appellant does not know any person by that name. The appellants brothers are Amarjeet Singh and Balkar Singh. The appellant further submitted that he was not only discharged in some of the prosecution cases but he was also acquitted on merits and inasmuch as in one case where he was convicted in the trial court, on appeal, he was acquitted by the Appellate Court. His acquittal in criminal cases is not on the basis of the Departmental failure to prove his guilt beyond any reasonable doubt but on the other hand his acquittal was on the basis of no evidence at all. The appellant further submitted that he was prosecuted by the respondents for causing hurt to their officers under sections 332, 353, 506 of the Indian Penal Code which went up to the Punjab and Haryana High Court in which case also the appellant was acquitted. The Honble High Court, inter alia, held that no such search has been held by the Enforcement staff under sub-section (4) of section 100 of the Code of Criminal Procedure.

6. I have given my careful consideration to the respective submissions made by the parties in writing as well as orally at the hearing. I have also carefully perused a copy of the order made in the complaint case No. 109 instituted on 20-12-1980 and decided on 20-1-1983 where the court found no cogent evidence against the appellant. It may, thus, be seen that it is not a case of preponderence of probabilities as contended by the respondents. Instead, it is a case of no evidence at all. The observations made by the Adjudicating Officer which have been strongly relied upon by the respondent indicate that the learned Adjudicating Officer proceeded more on surmises rather than on preponderence of probabilities. Furthermore, the evidence of the attesting witnesses in criminal proceedings, the discrepancy in the name of NRI on whose instructions payments were alleged to have been made and the names of the appellants brothers, lack of evidence on receipt of payment by the appellants or of any person identifying the appellant as the one who disbursed the same to other persons on the instructions received from NRI, and the allegation of enemity with the officers of the respondent as gathered from the criminal prosecution against the appellant under the Indian Penal Code ultimately resulting in the acquittal of the accused and the High Courts observations on the proprietary of search conducted in the case, all tend to tilt the preponderence of probabilities in favour of the appellant. The respondents cannot take shelter under the Departmental Advocates failure to properly conduct the criminal cases against the appellant wherein the appellants acquittal was honourable and he was fully exonerated of the charges levelled against him. It is not a case of acquittal on the basis of any benefit of doubt having been given on technicality of law as is sought to be made out by the respondents. Normally, where the accused is acquitted honourably and completely exonerated of the charges, it would not be expedient for the respondents to hold adjudication proceedings on the same very charges, grounds and evidence. The respondent should have taken into consideration the nature of the findings of the criminal cases. Accordingly, the respondents should not have held adjudication proceedings against the appellant on the same very charges, on the same evidence and on the same grounds on which the appellant has already been acquitted in criminal cases honourably and fully exonerated of the charges.

7. In the result, and for the reasons stated above, the impugned order is set aside and the appeal is allowed accordingly.


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