2007 (3) TMI 374 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the Appellate Tribunal's decision regarding the release of seized amount.
2. Consideration of evidence, particularly the statement of Dinesh Doshi.
3. Acceptance of the adjudication order by co-noticee and its impact on the charge against the respondent.

Issue-wise Detailed Analysis:

1. Validity of the Appellate Tribunal's Decision Regarding the Release of Seized Amount:
The Enforcement Directorate filed a civil miscellaneous appeal under Section 35 of the Foreign Exchange Management Act, 1999, challenging the Appellate Tribunal for Foreign Exchange's order dated 9-2-2004. The High Court examined whether the Appellate Tribunal was correct in directing the release of the seized amount of Rs. 10,29,000. The Tribunal had observed that the books of account produced by Shri Ilyas Moosa showed a cash balance of the said amount on the date of seizure, supported by sales bills and the cash book. The adjudicating authority also found no evidence to connect the seized money with any violation of FEMA, 1999. Consequently, the Tribunal upheld the adjudicating authority's decision to adjust the penalty from the seized amount and release the balance.

2. Consideration of Evidence, Particularly the Statement of Dinesh Doshi:
The appellant argued that the Appellate Tribunal failed to appreciate the statement of Dinesh Doshi in proper perspective. The Tribunal noted that the statement of Dinesh Doshi constituted only one piece of evidence and was corroborated by other evidence, including the statement of Ilyas Moosa and the accountant Abdul Sattar. The Tribunal found that the adjudicating officer had taken a judicious view by considering all the evidence in its entirety. The High Court held that both the adjudicating authority and the Appellate Tribunal had considered the statement of Dinesh Doshi and other material evidence, arriving at the correct conclusion. The High Court found no erroneous appreciation of evidence or perversity in the findings.

3. Acceptance of the Adjudication Order by Co-noticee and Its Impact on the Charge Against the Respondent:
The appellant contended that the co-noticee, Shri Dinesh Doshi, accepted the adjudication order, thereby proving the charge against the respondent. The adjudicating authority had framed charges against multiple individuals, including Dinesh Doshi and Ilyas Moosa, for receiving payments from persons residing outside India without the Reserve Bank of India's permission. The adjudicating authority found Dinesh Doshi guilty based on his own statement and corroborating statements from others. However, regarding the seized amount of Rs. 10,29,000, the adjudicating authority found no evidence linking it to any violation and directed its release after adjusting the penalty. The Appellate Tribunal upheld this decision, and the High Court found no reason to disturb the concurrent findings of fact by the adjudicating authority and the Tribunal.

Conclusion:
The High Court concluded that the findings of the adjudicating authority and the Appellate Tribunal were predominantly findings of fact, with no perversity or erroneous appreciation of evidence. The High Court emphasized the limitations on re-appreciation of evidence under Section 35 of the Act and dismissed the civil miscellaneous second appeal, with no order as to costs.