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2015 (4) TMI 232 - HC - FEMAContravention of Section 9 (1) (b) and (d) of the Foreign Exchange Regulation Act, 1973 - Penalty u/s 50 - Criminal prosecution for Economic Offences - Economic Offences Court acquitted the appellant holding that the prosecution has not proved the guilt of the appellant beyond all reasonable doubt - Imposition of pre deposit condition for hearing appeal against imposition of penalty - Held that - In view of the decision of the Supreme Court in Standard Chartered Bank's case (2006 (2) TMI 272 - SUPREME COURT OF INDIA), which has also been rendered under the provisions of the Foreign Exchange Regulations Act, the plea of the appellant that on his acquittal in the criminal case, no penalty is imposable on him, does not merit consideration, since the Supreme Court has categorically held that adjudication and prosecution are two independent proceedings and the finding in one is not conclusive in the other. In view of the above decision of the Supreme Court, this Court finds no reason to interfere with the order passed by the Appellate Tribunal. - Decided against appellant.
Issues:
1. Appellant's appeal against the order of the Appellate Tribunal for Foreign Exchange 2. Contravention of Foreign Exchange Regulation Act, 1973 3. Opportunity to represent during adjudication 4. Acquittal in criminal trial and imposition of penalty 5. Binding effect of criminal court's finding on appellate authority Analysis: 1. The appellant filed an appeal against the Appellate Tribunal's order partially allowing his appeal. The appellant contended that proper opportunity was not given to him during adjudication. The Tribunal reduced the penalty from Rs. 75,000 to Rs. 50,000, which the appellant pre-deposited. The appellant challenged the Tribunal's decision, leading to the present appeal before the High Court. 2. The case involved contravention of Section 9(1)(b) and (d) of the Foreign Exchange Regulation Act, 1973 (FERA Act). Penalties were imposed on the appellant and another individual, along with confiscation of a sum of Rs. 9 Lakhs. The appellant raised concerns regarding the lack of opportunity to present his side during adjudication. 3. The appellant was acquitted in a criminal trial related to the same matter. The Economic Offences Court acquitted the appellant, stating that the prosecution failed to prove his guilt beyond a reasonable doubt. This acquittal raised the issue of whether a penalty could be imposed on the appellant despite the criminal court's finding. 4. The High Court considered the binding effect of the criminal court's acquittal on the appellate authority. The appellant argued that no penalty should be imposed based on his acquittal. However, the respondent relied on a Supreme Court decision stating that adjudication and prosecution are independent proceedings, and a finding in one does not bind the other. The High Court upheld this principle, emphasizing the independence of adjudication and prosecution under the FERA Act. 5. Ultimately, the High Court dismissed the appeal, citing the Supreme Court's decision and affirming the independence of adjudication and prosecution. The Court found no reason to interfere with the Tribunal's order and ruled in favor of the respondent. No costs were awarded in the circumstances of the case.
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