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S. Saleem Khan Vs. the Deputy Director, Enforcement Directorate and anr. - Court Judgment

LegalCrystal Citation
SubjectFERA
CourtChennai High Court
Decided On
Case NumberC.M.A. No. 647 of 1983
Judge
Reported in1985(5)ECC146
AppellantS. Saleem Khan
RespondentThe Deputy Director, Enforcement Directorate and anr.
DispositionAppeal allowed
Cases ReferredRoshan Beevi v. Joint Secretary
Excerpt:
.....proceedings like those under the foreign exchange regulations, in view of the fact that they are quasi-judicial proceedings, such of those basic or universal rules of evidence are applicable even to such proceedings. unless the circumstances clearly show that there is intrinsic truth in the statement itself, it would be advisable to need corroboration in such matters. in dealing with this question, the appellate authority said that after all what nawaz khan stated was that the appellant was receiving monies and that he warned the appellant that such activities of his would bring a bad name to the shop. while holding that the appellant is guilty of the offence of violating the provisions of foreign exchange regulation act, he had stated in paragraph 8 that the case against the appellant..........rejected. in dealing with this question, the appellate authority said that after all what nawaz khan stated was that the appellant was receiving monies and that he warned the appellant that such activities of his would bring a bad name to the shop. the contention that he should have been subjected to cross-examination was rejected on the ground that the appellant himself had spoken to the facts mentioned in his statement and that there was no need for cross-examination. if really there was a corroboration, certainly he should have been permitted to be cross-examined. if there was no need for cross-examination on the ground that he had not spoken to the material facts, the statement of the appellant stands uncorroborated. however, the appellate authority seems to be of two minds. while.....
Judgment:

V. Ramaswami, J.

1. The appellant was found guilty of contraventions of the provisions of Sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 by the Deputy Director of Enforcement Directorate, in his order dated 13th May, 1980 and a penalty of Rs. 10,000 under each of the provisions was imposed. Though this finding was confirmed by the appellate authority, the penalty was reduced on both the counts from Rs. 10,000 to Rs. 6,000. The case of the Enforcement Directorate was that the appellant received a sum of Rs. 76,500 on the account of his brother-in-law, who was residing in Colombo and distributed the amounts to certain persons in India in accordance with the directions of his brother-in-law at Colombo. Both the original as well as the appellate authority, in finding the appellant guilty, relied on the statement of the appellant dated 25th October, 1979, which he had later on retracted on 31st October, 1979.

2. The learned Counsel for the appellant contended that the statement dated 25th October, 1979 was taken under threat and coercion by the Officers, Enforcement Directorate at Madurai, after taking him from his place of work to the office of the Enforcement Directorate at Madurai. He was not a free agent at that time. All external communications were not permitted and statements were obtained. After that it appears that the appellant came to Madras and on instructions from the appellant his counsel wrote a letter on 31st October, 1979 informing the Enforcement Officer that his client had instructed him to state that the statement obtained on 25th October, 1979 was by inducing and illegal methods and that he did not violate any of the Foreign Exchange Regulations.

3. The authorities below refused to accept the plea that the statement dated 25th October, 1979 was not voluntary. On the other hand, they were of the view that the retraction was not bona fide and that it was done after consulting his lawyer as a defence to the proceedings.

4. The case, as set out in the orders of the respondents was that twenty days prior to 25th October, 1979 the appellant received a letter from one Munab, the brother-in-law of the appellant stating that a sum of Rs. 55,000 had been arranged to be given to him by one Singam and that on receipt of the money, he had to disburse in the manner stated in that letter. After three days of receipt of that letter, the appellant received a sum of Rs. 40,000 from an unknown person who called on him and another sum of Rs. 15,000 from the same person, a few days later. The said sum of Rs. 55,000 was later paid by the appellant to the said Singam as instructed by his brother-in-law Munab. It was the further case that the appellant got back a sum of Rs. 1,000 from the said Singam and sent the same by means of a draft to one Karunanidhi, Bishopeer College, Trichy as instructed by his brother-in-law Munab. It is further stated that about two months prior to 25th October, 1979 the appellant had paid a sum of Rs. 500 to the said Karunanidhi as instructed by Munab, after receiving the money from Abubacker. All these facts are stated to be emerging from the statement of the appellant dated 25th October, 1979. Though the appellant is stated to have given the name of Abubacker and one Karunanidhi and the draft to Karunanidhi. Karunanidhi had not been examined. Nor have been the details relating to the draft investigated and found. In his statement, the appellant is stated to have referred to one Nawaz Khan in whose shop the appellant is employed. Though a statement was obtained from him, he was not permitted to be cross-examined. It is also seen from the statement of Nawaz Khan that he does not support the statement of the appellant in any material particulars. In these circumstances, the learned Counsel for the appellant strenously contended that there is only one statement by the appellant, which he had retracted and solely on the basis of such retracted statement, the appellant had been found guilty and that therefore the whole order of levying penalty is illegal. In this connection, he referred to a number of decisions in which the Supreme Court where it was (sic) held that though strict rules of evidence are not applicable to departmental proceedings like those under the Foreign Exchange Regulations, in view of the fact that they are quasi-judicial proceedings, such of those basic or universal rules of evidence are applicable even to such proceedings. We may simply cause reference to these judgments and it is not necessary for us to deal with them in detail. The following decisions are referred to by the learned Counsel for the appellant. 1. Shanti Prasad v. Director of Enforcement : [1963]2SCR297 2. Arriba Lal v. Union of India AIR 1961 SC 264, 3. Haroom Haji v. State of Maharashtra : [1968]2SCR641 , 4. Gopal v. Mahomed Jaffar : AIR1954SC4 . In re. Sathakathullah AIR 1965 Mad 94 and the Full Bench decision of this Court reported in Roshan Beevi v. Joint Secretary to the Government of Tamil Nadu, Public Department (Law and Order) 1983 TLJ 422.

5. We are of the view that so far as the retracted statements are concerned, though strictly there may not be any need for corroboration in law, it will all depend on the facts and circumstances in each case. When there is a retraction, we are put on caution in accepting such statements. Unless the circumstances clearly show that there is intrinsic truth in the statement itself, it would be advisable to need corroboration in such matters. In this particular case, the statement of the appellant was sought to be corroborated on the evidence of his employer, one Nawaz Khan. Though the appellant wanted to cross-examine him that request was rejected. In dealing with this question, the appellate authority said that after all what Nawaz Khan stated was that the appellant was receiving monies and that he warned the appellant that such activities of his would bring a bad name to the shop. The contention that he should have been subjected to cross-examination was rejected on the ground that the appellant himself had spoken to the facts mentioned in his statement and that there was no need for cross-examination. If really there was a corroboration, certainly he should have been permitted to be cross-examined. If there was no need for cross-examination on the ground that he had not spoken to the material facts, the statement of the appellant stands uncorroborated. However, the appellate authority seems to be of two minds. While rejecting the contention that the order is vitiated by not subjecting Nawaz Khan for cross-examination, the appellate authority said that there was no need for cross-examining him as his statement could not be taken as corroborating the statement of the appellant. While holding that the appellant is guilty of the offence of violating the provisions of Foreign Exchange Regulation Act, he had stated in paragraph 8 that the case against the appellant is proved by his statement as well as the statement of his employer Nawaz Khan. The appellate authority therefore had specifically relied on the statement of Nawaz Khan as corroborating the statement of the appellant, but without giving him an opportunity to cross-examine him. It may be that the appellant's brother-in-law Munab of Colombo and Abubaker had denied the transaction by their letters. However, no explanation is forthcoming as to why Karunanidhi to whom a draft for a sum of Rs. 1,000 is supposed to have been sent by the appellant had not been examined. On the facts we are satisfied that apart from the statement of the appellant dated 25th October, 1979, there is no other evidence on which the respondents could have relied on in finding him guilty. That statement was retracted and though there was enough scope for a detailed enquiry and proving that the retraction was not justified, the respondents have not taken any steps to prove that the statement originally given by the appellant is true. In this connection we have also to keep in mind that the burden is on the department to prove contravention of the provisions. In the circumstances, therefore, we are unable to accept the uncorroborated statement as enough for finding the appellant guilty.

6. In the result, the appeal is allowed. The orders of the respondents are set aside and if the penalty had been already paid, the respondents are directed to refund the money to the appellant. However, there will be no order as to costs.


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