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Valliammai Achi Vs. Director of Enforcement, Madras - Court Judgment

LegalCrystal Citation
SubjectFERA
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 599 of 1978
Judge
Reported inAIR1983Mad92
ActsForeign Exchange Regulation Act, 1947 - Sections 5(1)
AppellantValliammai Achi
RespondentDirector of Enforcement, Madras
Appellant AdvocateK.P. Jagadeesan, Adv.
Respondent AdvocateK. Swamidurai, Addl. Central Government Standing Counsel
Cases ReferredNani Gopal v. Howrah Municipality
Excerpt:
.....board - section 5 (1) of foreign exchange regulations act, 1947 - appellant challenged order of appellate board holding appellant guilty of contravention of section 5 (1) - charge as originally framed has not been established - person on whose instructions appellant said to have received sum in question has not been shown to be person resident outside india at relevant time - section 5 (1) (aa) not contravened - not open to appellate board to frame new charge based on statement of person claiming to have received money in question in abroad and then having paid it to appellant - original charge of receipt of money on instruction of different person failed - new charge cannot be accepted as correct - appeal allowed. - - 3. there was an appeal to the foreign exchange regulation..........of s. 5 (a) (aa) of the foreign exchange regulation act 1947.2. the residential premises of one ramaswami chettiar was searched on 22nd may 1970, and a statement was recorded from him by the enforcement officers and on the basis of the said statement given by ramaswami chettiar, the residence of the appellant was searched by the enforcement officers on 23rd may, 1970. during the search, three aerogrammes and indian currency notes amounting to rs. 8100/- were seized. the seized aerogrammes had been addressed to the appellant by her sons messrs. sumbandam and kasi viswanathan. a statement was also taken from the appellant at the time of the seizure by the enforcement officers on 23rd may, 1970. in the statement the appellant had stated that messrs sambandam and kasi viswanathan. her.....
Judgment:

Ramanujam, J.

1. This appeal arises against the order dated 23-6-1978 of the Foreign Exchange Regulation Appellant Board, affirming the order of the Enforcement Directorate, imposing a personal penalty of Rs. 5,000 and confiscating Rs. 18,100/- recovered from the appellant, for contravention of S. 5 (a) (aa) of the Foreign Exchange Regulation Act 1947.

2. The residential premises of one Ramaswami Chettiar was searched on 22nd May 1970, and a statement was recorded from him by the Enforcement Officers and on the basis of the said statement given by Ramaswami Chettiar, the residence of the appellant was searched by the Enforcement Officers on 23rd may, 1970. During the search, three aerogrammes and Indian currency notes amounting to Rs. 8100/- were seized. The seized aerogrammes had been addressed to the appellant by her sons Messrs. Sumbandam and Kasi Viswanathan. A statement was also taken from the appellant at the time of the seizure by the Enforcement Officers on 23rd May, 1970. In the statement the appellant had stated that Messrs Sambandam and Kasi Viswanathan. her sons, were carrying on money-lending business at Malacca, that they had sent the seized aerogrammes, that by those aerogrammes they had instructed the appellant to receive some money from Ramaswami Chettiar in the presence of one Ayothi Naidu, that in fact Ramaswami Chettiar came to the appellant's house some time ago and gave her Rs. 20,000, that out of the said sum of Rs.20,000/-, she had spent a sum of Rs. 1900/- that out of the balance of Rs.18,100/- she had deposited Rs. 10,000/- with her mother-in-law, Smt. Alagammai Achi and that the remaining Rs. 8,100/- was seized from her premises had no connection with her shop. Pursuant to the summons issued by the Enforcement Directorate to the appellant requiring her to produced the same after withdrawing it from her mother-in-law. Based on the statement seizure of the sum of Rs. 8100/-, as also the aerogrammes written by her sons, adjudication proceedings were initiated as against the appellant and by his order of adjudication dated 31st December 1973, the Deputy Director of Enforcement, Madras, held the appellant guilty of contravention of Section 5 (1) (aa) of the Act and imposed a personal penalty of Rs. 5000 and ordered confiscation of the said two amounts of Rs. 8100 and Rs. 10,000/- under Section 23 (1-B) of the Act.

3. There was an appeal to the Foreign Exchange Regulation Appellate Board, by the appellant and in that appeal, the Board held, by its order dated 26th September 1975, that the order of the Deputy Director of Enforcement was bad for violation of the principles of natural justice in that no opportunity was given to the appellant to cross-examine the witnesses. In that view, the Board allowed the appeal and remitted the matter to the Deputy Director of Enforcement for a fresh disposal.

4. After remand, the Assistant Director of Enforcement passed a fresh adjudication order practically confirming the earlier order imposing a penalty of Rs. 5000/- confiscating the sum of Rupees 18100.

5. There was again an appeal to the Appellate Board by the appellant. In that appeal, it was mainly contended (1) that the appellant's son Kasi Viswanathan on whose instructions the sum of Rs. 20,000/-, was said to have been received by the appellant through Ramaswami, were not resident outside India and therefore Section 5 (1) (aa) will not stand attracted, and (2) that the statement of the appellant dated 23rd May, 1970 taken at the time of the seizure of the amounts and the aerogrammes was not a voluntary one and therefore it should not be relied upon. Dealing with the first contention, the Appellate Board has specifically held that the appellant's son Kasi Viswanathan has not been shown to be a person resident outside India at the relevant time and that the endorsements made on his passport to the effect that he was not permitted to engage himself in any employment, business or profession there, would go to prove that he is not, in fact, a resident outside India. On the contrary, it relied on the statement of Ramaswami Chettiar given on 22nd May, 1970, which was to the effect that on the instructions of his son Muthukarupan Chettiar in Malacca, the amount was received by the appellant through him, and held that even if the disputed amount is not received by the appellant on the instructions of her son Kasi Viswanathan, it could be taken that the amount has been received through Ramaswami Chettiar on the instruction of Muthukaruppan Chettiar, a resident outside India. In this view, the Appellate Board confirmed the order of the Assistant Director of Enforcement imposing a personal penalty of Rs. 5000/- and confiscating the sum of Rs. 18100/-.

6. In this appeal, the learned counsel for the appellant contends that the Appellate Board is in error in upholding the order of the Assistant Director of Enforcement after giving the finding that the appellant's son is not a person resident outside India. According to the learned counsel the charge being one of receipt of money on the instruction of Kasi Viswanathan, a person resident outside India , the department has to prove that charge strictly. Having failed to prove that Kasi Viswanathan, from whom the appellant is alleged to have received instructions, is shown to be a person not residential outside India, the charge must automatically fail and that it is not open to the department to alter the same or substitute a new charge in the place of the original charge and to uphold the order of penalty on the basis that the altered or the substituted charge has been proved by the material on record.

7. In this case, the original charge against the appellant at the stage of the adjudication, proceedings was that she had received a sum of Rs. 20,000/- through Ramaswami as per the instructions of her son Kasi Viswanathan residing at Malacca. Though this charge was taken to have been proved by the Deputy Director of Enforcement, the Appellate Board has taken the view that Kasi Viswanathan is not a person residing outside India and therefore any amount received by the appellant as per his instructions cannot be the subject matter of contravention of Sec. 5 (1) (aa) of the Act. As per the said finding of the Appellate Board, the charge cannot be said to have been proved. To this extent, therefore, the learned counsel appears to be right in his submission. The charge as originally framed has not been established on the finding of the Appellate Board. When the Appellate Board specifically finds that Kasi Viswanathan, on whose instructions the appellant is said to have received the sum of Rs.20,000/- has not been shown to be a person resident outside India, Section 5(1) (aa) cannot be said to have been contravened. The provisions of Section 5 (1) (aa) are to the following effect: '5 (1).....no person in or resident in, the States shall - (aa) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India.'

8. If Kasi Viswanathan is not shown to be a person resident outside India, then Section 5 (1) (aa) will not come into play. Therefore, it is clear that on the finding of the Appellate Board that Kasi Viswanathan has not been shown to be a person resident outside India at the relevant time, the charge of contravention of S. 5 (1) (aa) has to fail.

9. However, the Appellate Board relying on the statement of Ramaswami given on 22nd May, 1970 that on the instructions of his son Muthukaruppan Chettiar who had a money lending shop at Malacca he paid the sum of Rupees 20,000/- to the appellant, has held that the appellant has received the sum of Rs. 20,000/- through Ramaswami on the instructions of Muthukaruppan Chettiar at Melacca and this will attract S. 5 (1) (aa). It is no doubt true that the statement of Ramaswami Chettiar shows that Muthukaruppan Chettiar is resident at Malacca and on his instructions he received a sum of Rs. 30,000/- through one Thirupathi and paid the sum of Rupees 20,000/- out of it to the appellant. The Appellate Board relying on this, held that the facts establish that the appellant has received the sum of Rs. 20,000/- from Ramaswami Chettiar on the instructions of Muthukaruppan Chettiar who is a resident outside India and this will amount to contravention of S. 5 (1) (aa) of the Act.

10. The Appellate Board was of the view that it has jurisdiction to alter the charge if the evidence is such as to establish the altered charge. In support of that view, the Appellate Board has relied on the following decisions :-

1. Begu. v . Emperor, .

2. Bejoy Chand v. State of West Bengal, : 1952CriLJ644 .

3. W. Slaney v. State of M. P., : 1956CriLJ291 and

4. Nani Gopal v. Howrah Municipality, : 1958CriLJ271 .

11. In this appeal, which is directed against the said order of the Appellate Board, the learned counsel for the appellant contends that the Board, having held that the charge leveled against the appellant originally had not been established, erred in holding that the appellant is guilty of a fresh charge that she received the sum of Rs. 20,000/- from Ramaswami on the instructions of Muthukaruppan Chettiar, a resident outside India, without framing a fresh charge and without giving an oppurtunity to the appellant to rebut that charge. The learned counsel for the appellant also contends that even at the time of the argument, the Appellate Board did not indicate that it is going to alter the charge and that it was a matter of surprise to him when he received the order of the Appellate Board altering the charge and holding that the altered charge is proved on the material on record. Thus, the main question is whether the Appellate Board having held that the original charge had not been established against the appellant, could alter the charge at the stage of appeal without giving any oppurtunity to the appellant to answer the altered charge, merely on the basis of a statement of Ramaswami Chettiar dated 22nd May, 1970, especially when the veracity of the facts found in the statement of Ramaswami Chettiar cannot be tested by cross-examination and he is no more.

12. It is seen from the order of the Assistant Director of Enforcement that he proceeded on the basis of the statement of Valliammai Achi in which she had stated that she received the sum of Rs. 20,000/- from Ramaswami on the instructions of her son Kasi Viswanathan and therefore held that the charge against her has been proved, and that finding was challenged by the appellant before the Appellate Board. The Appellate Board agreed with the appellant that Kasi Viswanathan has not been shown to be a person resident outside India. Therefore, even if the appellant has received the sum of Rs. 20,000/- through Ramaswami, on the instructions of Kasi Viswanathan, that will not be a contravention of Section 5 (1) (aa). Perhaps taking note of the situation, the Appellate Board, relying on the statement of Ramaswami that the amount was received from his son Muthukaruppan Chettiar residing at Malacca, and paid over to the appellant has found a contravention of Section 5 (1) (aa). It is in this context the Appellate Board has held that it has got the power to alter the charge at the appellate stage if the facts establish the altered charge. We do not see how the Appellate Board can alter the charge in the manner it has done at the appellate stage. The only case that the appellant was asked to meet at the adjudication proceedings is that she received a sum of Rs. 20,000/- through Ramaswami Chettiar on the instructions of her son Kasi Viswanathan, a person resident outside India. Now the charge as altered, in respect of which the appellant has been found guilty, is that she received the amount from Ramaswami on the instructions of one Mutukaruppan, a resident outside India. The charge is totally different, and the appellant, admittedly, has not been given any oppurtunity to rebut this charge at any time. Even before the Appellate Board, no oppurtunity was given to the appellant to meet the fresh charge. As already stated, the Appellate Board has referred to certain decisions as empowering the Board to alter the change if the evidence is such as to establish the altered charge. The decision referred to by the Appellate Board cannot be taken to lay down such a proposition as has been laid by the Appellate Board.

State of West Bengal,

307

326

326

326

307

326

Emperor

302

201

State of M. P.

302

34

302

302

302

302

302

Howrah Municipality,


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