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Sudershan Boury and Etc. Vs. the Director of Enforcement, New Delhi - Court Judgment

LegalCrystal Citation
SubjectFera
CourtKarnataka High Court
Decided On
Case NumberMisc. First Appeal Nos. 166 and 181 of 1979
Judge
Reported inAIR1982Kant135; [1982]52CompCas305a(Kar); ILR1982KAR280
ActsForeign Exchange Regulation Act, 1973 - Sections 50 and 54; Foreign Exchange Regulation Act, 1947 - Sections 4(1) and 9
AppellantSudershan Boury and Etc.
RespondentThe Director of Enforcement, New Delhi
Appellant AdvocateK.R.D. Karanth, Adv.
Respondent AdvocateK. Shivashankar Bhat, Central Govt, Sr. Standing Counsel
Excerpt:
.....and as such the appeals are entertainable by this court (vide ramnaresh pandey v. jusjit singh, air 1964 sc 11140, at page 1153). 6. adverting to the next aspect, as stated above, while inquiring into the facts both deputy director of enforcement as well as the learned member of the board have concurrently agreed that there are no mala fide intentions in the3e transactions and they do not represent any money spinning adventure, as such a liberal and sympathetic view has to be taken......his family landed in india for consideration of permanent residence. kulbhushan boury and smt. sudershan boury were having joint bank accounts and in england subscribing to a life insurance policy. deputy director of enforcement, madras, after holding adjudication proceedings found both of them guilty of contravention of ss. 4(1) and 9 of foreign exchange regulation act 1947 and ss. 8(1) and 14 of the foreign exchange regulation act 1973 and imposed penalty on kulbhushan boury, at rs. 6,9,25/- and against his wife smt. sudershan boury at rs. 4,025/-. aggrieved by the said orders, they went up in appeals before the board in appeal nos. 1464/1977 and 142/1978. in the appeals which were heard together by the member, of the board, the learned member has observed .'the transactions do not.....
Judgment:

Sabhahit, J.

1. These two appeals are directed against the common order dated 18-10-78, passed by the Foreign Exchange Regulation Appellate Board, in appeal Nos. 1464/1977 and 142/1978, on its file, reducing the penalty against the husband from Rs. 6,925/- to Rs. 4,000/and against the wife from Rs, 4,025/- to Rs. 2,000/-.

2. Kulbhushan Boury was born in Kenya and was carrying on business in that country which he had to abandon in 1970 due to political upheaval. Though a holder of British passport and a person residing and working for gain in Nairobi for a near half century, his business license was not renewed by the Kenya Government and he along with his family landed in India for consideration of permanent residence. Kulbhushan Boury and Smt. Sudershan Boury were having joint bank accounts and in England subscribing to a life insurance policy. Deputy Director of Enforcement, Madras, after holding adjudication proceedings found both of them guilty of contravention of Ss. 4(1) and 9 of Foreign Exchange Regulation Act 1947 and Ss. 8(1) and 14 of the Foreign Exchange Regulation Act 1973 and imposed penalty on Kulbhushan Boury, at Rs. 6,9,25/- and against his wife Smt. Sudershan Boury at Rs. 4,025/-. Aggrieved by the said orders, they went up in appeals before the Board in appeal Nos. 1464/1977 and 142/1978. In the appeals which were heard together by the Member, of the Board, the learned Member has observed .

'The transactions do not smack of compensatory payments or any other money spinning adventure and hence 'in terrorem' outlook towards penalty is not called for in this case and I find that ends of justice would be met by reducing the penalty on Shri Kulbhushan Boury from Rs. 6925/- to 4,000/- and on Smt. Sudershan Boury from Rs. 4,025/- to Rupees 2.000/-.'

Aggrieved by the quantum of penalty levied in the two cases the above appeals are instituted by Kulbhushan Boury and Smt. Sudershan Boury, before this Court.

3. Learned counsel Sri K. R. D. Karanth, submitted that both, Deputy Director of Enforcement, Madras and Board having found that the transactions were not aimed at money spinning and as such a deterrent attitude was not necessary, have still imposed rather heavy penalties and hence he submitted before us that the penalty should be reduced, As against that Sri Shivashankar Bhat, learned Senior Standing Counsel for Central Government, submitted that no appeal could be instituted before this Court, unless a question of law was involved and there was no question of law as such involved in these appeals and therefore the appeals were not maintainable. He further submitted that the penalties imposed could not be considered as heavy.

4. The points, therefore, that arise for our consideration in these appeals are :

(1) Whether the appeals are maintainable?

(2) Whether the penalties require to be reduced?

5. It is no doubt true that S. 54 of the Foreign Exchange Regulation Act 1973 reads :

'An appeal shall lie to the High Court only on question of law from any decision or order of the appellate Board under sub-section (3) or (4) of S. 52(4) of the Act'.

Section 50 of the Foreign Exchange Regulation Act, 1973 speaks of penalties. It reads :

'If any person contravenes any of the provisions of this Act (other than S. 13, C1. (a) of sub-section (1) of S. 18 and Cl (a), of sub-section (1) of S. 19 or of any rule, direction or order made there under, he shall be liable to such penalty not exceeding five times the amount or value involved in any such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement not below the rank of an Assistant Director of Enforcement specially empowered in this behalf by order of the Central Government (in either case hereinafter referred to as the adjudicating officer'

Thus, Section 50 speaks of maximum penalty to be levied. That being five times the amount or value involved in any such contravention or 5,000/- whichever is more. When the section speaks of the maximum penalty, it is obvious that the authority has the discretion to impose any fine less than that also. This discretion which is conferred on the authority by the section has to be exercised in a judicial manner and the exercise of such discretion is a question of law and it is needless for us to point out that the Supreme Court of India has been at pains to point out in recent years that sentencing is an important branch of law and that it is a complex process involving intricate questions of facts and law. That being so, we are satisfied that the present appeals where the quantum of penalty and exercise of judicial discretion are concerned involve questions of law and as such the appeals are entertainable by this Court (vide Ramnaresh Pandey v. State of M. P, : 1974CriLJ153 ; Indo-China Steam Navigation Company Ltd., v. Jusjit Singh, AIR 1964 SC 11140, at page 1153).

6. Adverting to the next aspect, as stated above, while inquiring into the facts both Deputy Director of Enforcement as well as the learned Member of the Board have concurrently agreed that there are no mala fide intentions in the3e transactions and they do not represent any money spinning adventure, as such a liberal and sympathetic view has to be taken. Having said so, the learned Member of the Board has reduced the penalty from Rs. 6,925/- to Rs. 4,000/- against the husband and Rs. 4025/- to 2,000/- in the case of the wife Smt. Sudershan Boury.

7. The learned counsel for the appellants submitted before us that if really a liberal and sympathetic view were to be taken, the Board should have and could have reduced the penalties having regard to the quantum involved in the case. We are persuaded to agree with the submission so made. We feel it just and proper to reduce the penalty of Rs. 4,000/- levied by the Member of the Board against Sri Kulbhushan Boury to Rs. 2,000/- and so far as his wife is concerned as she had personally no role to play in the affair, we deem it just and proper to reduce the fine against her from Rs. 2,0001- to Rupees 1,000/-.

8. In the result, the appeals are partly allowed. Kulbhushan Boury shall pay penalty of Rs, 2,000/- and his wife Smt. Sudershan Boury shall pay Rs. 1,000/- as penalty. No costs of these appeals.

9. Appeals partly allowed.


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